LOTTERIES, FRAUDS ^ OBSCENITY 
IN THE MAILS. 



by ; 

JOHN L THOMAS, 

Ex-Judge of the Supreme Court of Missouri and 
Ex-Assistant Attorney-General for the 
Postoffice Department. 



> ■> 



Press of E. W. Stephens, 

Columbia, Mo. 

1900. 



THF LIBRA** OF 


CONGR€SS, 


Two COHfcc? Ri-OSJVtED 


?§©2 


C<WWIOWT FWTBT 


CLAS& a fife No. 


/ 1 «j S 3 


conr b. 



,4 2.4- 



Entered according- to Act of Congress, in the year 1900, by 
E. W. STEPHENS, 

in the office of the Librarian of Congress, at Washington, D. C. 



PREFACE. 



TIIK author offers no apology for presenting this treatise 
to the public. While Assistant Attorney-General for the 
Postoffice Department lie saw or thought he saw need 
for some work that would guide postal officers, the publishers of 
newspapers, the Benehand Bar and the people generally in de- 
termining what is non-mailable matter on account of its relation 
to lottery and fraudulent schemes and obscenity. There is now 
no work on this subject in this country or any other so far as 
the author knows, and a judge, attorney or postal official, 
desiring information on the subject of non-mailable matter of 
this character, must go through the decisions of the various 
State and Federal Courts. These cases are grouped into 
classes so the reader can easily find what he wants. 

That the work is imperfect is admitted and it is evident 
it might have been made more or less voluminous but the 
different subjects have been treated as briefly as possible, con- 
sistent with clearness. 

"While the author has taken the liberty of freely criticiz- 
ing the decisions of the courts and officers, when he deemed it 
proper, he has given all the cases he could find whether they 
contained views in consonance with his own or not and it is left 
to a generous public to determine whether the criticism be 
just or unjust. 

THE AUTHOR. 
DeSoto, Missouri. 

January 15. 1900. 



TABLE OF CASES CITED 



A 

Section 

Alabama, Boyd v 305 

Alexander, Parsons v • 20 

Alexander v. State 62 

Allgeyer v. State 294 

Allport v. Null 20,138 

Alvord v. Smith 21, 47, 48 

Am. Art Union. Bennett v 76 

Am. Art Union. Governors, etc. v 76, 86, 111 

Am. Art Union, People v 7G 

Am. Print Works v. Lawrence 299 

Anderson v. Baker 285 

Anderson, Smith v 165 

A ndrews, U. S. v 224 

Applegarth v. Colley 20 

Association v. Ramsdell 49 

Association v. State 76, 83 

Association. State v 15 

Association v. Znmstein 287, 288, 291 

A tli or ford v. Board 65 

Aufmordt v. ITodden 269, 279 

Augel v. Hodden 269 

B 

Baker. Anderson A' 285 

Bagley v. State 51 

Ballard v. Brown 21. 48 

Ballock v. State 7, 15 

Bamble v. State 52 

Bank, Cunningham v 36 

Bank v. Merchant 286. 287 

Bar bin v. Connolly 296, 299 

Barclay v.*Poarson 90. 97, 103 

Bartlett v. Kane 269 

Barin, Metropolitan Board v 305 

Basket- (ampagne v. U. S 281 

Batty v. Marriott 20 

Bayland v. State 11 

Beach, IT. S. v 244 

Beadles v. Bless 38 

Beadon, Sykes v 164, 165. 175 

Beale, Ellis v 51 

Beard, Atherford v 65 

Beatty, U. S. v 10. 223 

Belcher v. Linn 269 

P.oll v. State 11, 13. 42. 83. 85. 181. 186 

Bennett v. Am. Art Union 76 

V 



vi Table of Cases Cited. 

Bennett, U. S. v 242 

Benson v. McMahan *. 242 

Bernard v. Taylor 65 

Berry, Rumsey v 33 

Bills, Fleming v 187 

Black, U. S. v 276 

Blackman, Morris v 69, 90, 96, 97 

Blair v. Ridgely . 285 

Blanchard, Ex Parte 15, 76 

Bland v. Collett 65 

Blaxton v. Pye 51 

Blazin v. Miller 299 

Bless, Beadles v 38 

Blockham v. Gresham 270 

Board of Health, People v 295 

Boardman v. Thompson 283 

Boneil, State v 79 

Bonsall, Kirkpatrick v 40 

Book, State v 59 

Borden, Luther v 262, 263 

Borden, Doe v 264 

Boston Beer Co. v. Massachusetts 304, 305 

Boyd v. Alabama 305 

Boyd v. State 76 

Boyle, U. S. v 237 

Bradberry, Fairfield Floral Co. v , 291, 292 

Bradshaw, O'Connor v 163 

Brand v. U. S 216, 228 

Branham v. Stallings 115 

Brashear v. Mason 259, 268 

Britton, Irving v . 143 

Bronsoirs Ag. Ass'n v. Ramsdell 49 

Brown, Ballard v 21, 48 

Brown v. Leeson 65 

Brown v. Overberry 20 

Brown, U. S. v. . . 238 

Brua's Appeal . 39. ] 70 

Bryant, State v . 78b 

Buck v. State 11 

Buekalew v. State, . 177, 179, 186 

Burgess v. Gray 262 

Burnell, U. S. v 239 

Bushnell v. Leland 272 

Russell, Swaine v 116 

c 

Cannon v. Quick 55 

Caminda v. Hulton 125, 139, 140, 141 

Casey v. Galli 272 

Castello v. Curtis 4S 

Chaney P. L. Co. v. Hart 118 

Chapman, Elders v 122 

Charles, Seidenbender v 7, 15, 70, 120 

Chavanah v. State 181, 191 

Cheatham v. U. S 279 

Cheek v. Com 50 

Cheesum v. State 51 

Chesman, U. S. v 242 

Choe Chan Ping v. U. S 277, 281 

C. & L. T. Co. v. Sandford 291 



Table of Cases Cited. vii 

Christensen v. Crowley 300 

Chubb, Com. v 191 

City Produce Exchange v. McGrew . . . . 42 

Clark v. Com 50 

Clark, State v 11, 84 

Clark, U. S. v 242, 244 

Clayton v. Jennings 55 

Cody, Goodman v 66 

Cohn v. Koehler 191 

Colgan, Crof ton v 20 

Collett, Bland v 65 

Colley, Applegarth v 20 

Column, Ferguson v 45a 

Columbia Investment Co 155 

Comly v. Hillegrass 49 

Commissioners, U. S. v 254 

Commissioner v. Whitely 271, 313 

Commerford v. Thompson .287 288, 291 

Com., Cheek v 50 

Com. v. Chubb 191 

Com., Clark v 50 

Com. v. Emerson 74, 110 

Com. v. Gourdin 59 

Com. v. Landis 242 

Com. v. Manderfield 118 

Com., Miller v 80 

Com. v. Sheriff 80, 191 

Com. v. Simonds 53 

Com. v. Taylor 59 

Com. v. Tilton 51 

Com. v. Wright 182, 191 

Connolly, Barbin v 296, 299 

Coombs v. Dibble 20 

Cortes v. Jacobu^ 280 

Costello v. Curtis 48 

Cox, Hall v 125 

Crickett, Hussey v 65 

Crofton v. Colgan 20 

Cross v. People 15 

Crowley v. Ciiristensen 300 

Culbertson, Lyon v 35 

Cunningham v. Bank 36 

Curtis, Costello v 48 

D 

Dalmar, Eolfe v 76 

Davenport v. Ottoway 83 

Davis, U. S. v 237 

Dauphin v. Key 285, 286, 287, 288 

Day. Porter v 48 

Deboy, State v 61 

Decatur v. Paulding 257. 268, 276 

DeCosta v. Jo es 65 

Delier v. Society 21 

Dent v. State 277 

Devlin, Negley v " 15, 76. 82 

Dibble, Coombs v. 20 

Dill, Pearce \ 41 

Dinsman', Wilkes v 254 



viii Table of Cases Cited. 

Dion v. St. John Baotist Church 175b 

Dodds, Rep-, v 135, 137 

Dodge, U. S. v 240 

Doe v. Borden 202, 264 

Doran, Ex Parte 297 

Douglass v. Kennedy 305 

Dudley, Luddington v 143 

Dunham v. St. Croix M'f'g Co 136, 137 

Dunlop v. U. S 245 

Dunn v. People 15, 70, 78a, 191 

Durland v. U. S 201 

Dwyer, Ex Parte 143 

B 

Eagerton v. Furzeman 51 

Earl of March v. Pigot 65 

Earnshaw v. U. S 282 

Edwards v. State 51 

Ekiu v. U. S 280 

Elders v. Chapman 122 

Eldred v. Mallov 37 

Elliott, Good v . 65 

Elliott, People v 11, 112, 144 

Elliott, U. S. v 237 

Ellis v. Beale 51 

Emerson, Com. v 74, 110 

Equitable Investment Co 169 

Eubanks v. State 15, 42, 78 

Evans v. Jones 65 

F 

Fairfield Floral Co. v. Bradberry 291, 292 

Faley v. Harrison * 262 

Fall, Johnson v 38 

Fallon, People ex rel. v 21, 28a, 29, 145 

Fav, U. S. v 205. 206 

Felton, Teal v. . 274 

Ferguson v. Colman . 45a 

Ferriera, U. S. v 261, 262 

Fertilizing Co. v. Hyde Park 303 

Field, Gattv v 139 

Finney, U. S. v 229 

Fisk, Ex Parte 281 

Fleming v. Bills 187 

Flvnn, Scollans v 51 

Fong Yue Ting v. U. S 281 

Fontenberry v. State 34 

France v. State . . * 13 

Freeman, Reg. v Si 

Fulkerson. U. S. v 7, 172 

Furzeman. Eagerton v 51 

G 

Gaines v. Thompson 265 

Galli, Casey v 272 

Gamble v. State 52 

Gattv v. Field 139 

Gee, U. S. v 239 



Table of Cases Gited. ix. 

Gibbons v. Governor, etc 21 > 4? 

Gibson, Kennedy v 2 ?2 

Gilbert v. Syker 6 f 

Gill, Wilkinson v 7 ; ni 

Gillson, People v 74, 110 

Golden Rule v. People 43 

Good v. Elliott ; 65 

Goodburn v. Marley 51 

Goodman v. Cody 66 

Gourdin, Com. v 59 

Governors, etc. v. Am. Art Union 76, 86, 111 . 

Grace v. McElroy 51 

Gray, Burgess v 262 

Gray v. Reily 144 

Gresham, Blockham v 270 

Gridley v. Lord Palmerston 267 

Griffin, Mosher v • • • 51 

Griffin v. Pembroke 237 

Grimes, State v 189 

Grimm v. U. S 244 

Guerss, Henkins v 65 

Gupton. State v 64 

Guthrie, U. S. v 268 

H 

Haeflinger, U. S. v 219 

Hall v. Cox 125 

Hamilton v. State, 62 

Harmon, U. S. v 242, 253 

Hankins v. Ottinger 21, 47 

Harlen v. U. S 56 

Harlev v. Rice 65 

Harris, Reg. v 96. 184, 191 

Harris v. White 21, 145 

Harrison, Faley v 262 

Hart, Chaney P. L. Co. v 118 

Haynes, U. S. v: 218 

Hazlett, Jacobus v 176, 241 

Health Department v. Rector . . 205 

Hedden, Aufmordt v 269, 279 

Hedden, Auget v 269 

Henkins v. Guerss 65 

Hessing. L^nsinc v 293 

Hetton v. Merritt ' 269, 280 

Hicklin, Queen v 242 

Hill, Trimble v 20 

Hilleorass, Comlv v 49 

Hoboken L. & I. Co., Murray v 262, 264, 269, 280 

Holman v. State 15, 80. 191 

Holmes v. Hunt : 281 

Holt v. W^ood 108 

Hoover v. McChesney 290, 291a, 292. 311 

Hopkins. Yiek Wo V 280 

Horner v. U. S 7, 11, 15, 70, 73, 170, 175, 191, 192, 249. 253 

House's Case .■ 299 

Houston, New Orleans v. 306 

Howell, King v . . . . 51 

Hoyt. Rankin v 282 

Hudelson v. State 15. 83. 123. 134. 136 



x Table of Cases Cited. 

Huffman, McLain v 51 

Hull v. Ruggles 11, 15, 87, 111 

Hull v. State 49 

Hulton, Cauiinada v 125, 139, 140, 141 

Hunt, Holmes v 281 

Hunt, Railroad v 299 

Hussey v. Criekett 65 

Hyde Park, Fertilizing Co. v . 303 

I 

Irving v. Britton 143 

Irwin v. Osborne 20 

J 

Jackson, Ex Parte 192, 252, 253, 284, 292 

Jacobus, Cortes v 280 

Jacobus v. Hazlett 176 

Jamieson, Reg. v 136, 137 

Jarvis, U. S. v 244 

Jasper Land Co. v. Paulk 119 

Jennings, Clayton v 55 

Jones, De Costa v 65 

Jones v. Ramsdell 65 

Jones, U. S. v 200, 214 

Johnson v. Fall 38 

Johnson v. Lansley 20 

Johnson, Mississippi v 265 

Johnson v. State 51 

Jung Ah Lung, U. S. v 280 

K 

Kane, Bartlett v 269 

Kansas, Mugler v 301, 302 

Kansas v. Zeibold 301 

Kansas Mer. Ass'n, State v 15 

Kendall v. Stokes 256, 267, 268, 274 

Kennedy v. Gibson 272 

Kentucky, Patterson v 305 

Key, Dauphin v. . . .285, 286, 287, 288 

Kidd v. Pearson . . 299 

King v. Howell . 51 

Kingsman, Eltham v 65 

Kirkpatrick v. Bonsall 40 

Knapp, Misner v 21 

Koehler, Cohn v 101 

Kohlshorn v. State . 178 

Knox, U. S. v. . «, . 272 

Korten v. Seney 11 

L 

Lamar, U. S. v 275 

Lamkin, U. S. v 245 

Lander v. P. A. T. Soc 121 

Landis, Com. v 242 

Lansburg v. U. S 110 

Lansing v. Hessing 293 

Lansley, Johnson v 20 

Lawrence, Am. Print. Works v 299 



Table of Cases Cited. xi 

Lawton v. Steele 299 

Lee Tong, Ex Parte 60 

Leeson, Brown v 65 

Leighton, State v 59 

Leland, Bushnell v 272 

Ling, U. S. v 244 

Linn, Belcher v 269 

Loiseau v. State 11, 13, 177 

Long v. State 7, 74, 110 

Longbotham, Lynall v 51 

Lord Palmerston, Gridley v " 267 

Loring, U. S. v 209 

Lovell, State v 102, 139, 143 

Lucas v. Wallace 107 

Luddington v. Dudley 143 

Lumsden, State v 11, 13, 191 

Luther v. Borden 262, 263 

Lutz, U. I. Ass'n v 147, 174 

Lynall v. Longbotham 51 

Lynch v. Rosenthal 69, 123, 124 

Lyon v. Culbertson 35 

M 

Madison, Marberry v 255 

Magdaline College Case 84 

Malloy, Eldred v 37 

Manderfield, Com. v 118 

Manser, State v 59 

Marberry v. Madison 255 

Marley, Goodburn v 51 

Marriott, Batty v. ... ■ 20 

Martin v. Mott 258. 280 

Martin, U. S. v 244, 245 

Mason, Brashear v 259, 268 

Massachusetts, Boston Beer Co. v 304, 305 

Matthews, Railroad Co. v 291 

McChesney, Hoover v 290, 291a, 292. 311 

McDonald, U. S. v 44, 161, 166, 170 

McElroy, Grace v 51 

McGrew v. City Produce Exchange 42 

McLain v. Huffman 51 

McLanahaii, v. Mott 69. 173 

McLaughlin v. N. M. I. Co., 110, 170 

McMahon, Benson v 280 

Merchant, Bank v 286. 287 

Merritt, Hetton v 269, 280 

Metropolitan Board v. Barin 305 

Miller, Blazin v 299 

Miller v. Com 80 

Misner v. Knapp 21 

Mississippi v. Johnson 265 

Mitchell, U. S. v 216 

Monroe v. Smelly 7 

Moren, State v. 15, 184 

Morris v. Blackman .' 69, 90, 96, 97 

Mossbaugh, Washington Glass Co. v 124 

Mosher v. Griffin - 51 

Mott. McLanahan a- 69, 173 

Mugler v. Kansas 301. 302 



xii Table of Cases Cited. 

Mumford, State v 15, 83, 89 

Murphy v. Rogers • 59 

Murray v. Hoboken L. & I. Co 262, 264, 269, 280 

M. Society, Wallingford v 165 

N 

Nathan, U. S. v 244 

National Endowment Co 170 

National In. Co. of Worthington 152 

National In. Co. of Cincinnati 154 

National In. Soc. v. Sherwood 168 

N. M. B. & I. Co. v. McLaughlin 110, 170 

Neglev v. Devlin 15, 76, 82 

Neil v. Ohio 273 

New Orleans v. Houston 306 

New Orleans v. Paine 265 

New York, Stone v 299 

Nutt, Allport v 20, 138 

Noble v. U. E. L. R. Co 265 

Noelke, People v 11 

O 

O'Connor v. Bradshaw 163 

Ogden v. Saunders . 281 

Ohio, Neil v 273 

Old Colony Co. v. Sherwood '. 167 

Olney, U. S. v 15, 114, 123, 184. 237 

Orear, Thornhill v 183 

Osborne, Irwin v . 20 

Ottinger, Hankins v 21, 47 

Ottoway, Davenport v 83 

Overberry, Brown v 20 

Overton, State v 76 

Owens, U. S. v 217 

P 

P. A. T. Soc, Lander v 121 

Paine, New Orleans v. 265 

Palmer v. State . . 49 

Parker, Queen v 95 

Parsons v. Alexander 20 

Passavant v. U. S 269, 282 

Patterson v. Kentucky 305 

Paulding, Decatur v 257, 268, 276 

Paulk, Jasper Land Co. v 119 

Payne, People v 180 

Fearce v. Dill . r 41 

Pearson v. Barclay 90, 97, 103 

Pearson, Kidd v. 299 

Pearson, Wilson v 199 

Pembroke, Griffin v 237 

Pennsylvania, Powell v 298 

People v. Am. Art Union 76 

People v. Board of Health 295 

People, Cross v 15 

People, Dunn v 15, 70, 78a, 191 

People v. Elliott ..11, 112, 144 

People ex rel. v. Fallon 21, 28a, 29. 145 



Table of Cases Cited. xiii 

People v. Gillson .74, 110 

People, Golden Rule v 43 

People v. Noelke 11 

People v. Payne 180 

People v. Reily 142 

People, Swigert v 52 

People, Thomas v 15, 98, 191 

People v. Weithoff 51 

Pettis Co. B. & I. Co 151 

Phalen v. Virginia . 305 

Pillow v. Roberts - 281 

Pigot, Earl of March v 65 

Politzer, U. S. v 190 

Porter v. Day 48 

Portis v. State 189 

Powell v. Pennsylvania 298 

Provident B. & I. Co . . . 150 

Pye, Blaxton v 51 

Q 

Queen v. Parker 95 

Queen v. Hieklin 242 

Quick, Cannon v 55 

R 

Railroad v. Hunt 299 

Railroad v. Matthews 291 

Railroad v. Noble 265 

Railroad v. Stimpson 266, 280 

Ramsey v. Berry 33 

Ramsdell, Bronson Ag. Ass'n v 49 

Randall, Jones v 65 

Randall v. State 7, 15, 77 

Rankin v. Hoyt 282 

Rapier, Ex Parte 192, 252, 253, 292 

Rapp, Schriber v 174 

Rector, Health Department v 295 

Reeves v. State - 186 

Reg. v. Dodds . . 135, 137 

Reg. v. Freeman : 81 

Reg. v. Harris 96, 184, 191 

Reg. v. Jamieson 136, 137 

Reid, U. S. v 206, 207 

Reily, People v 142 

Rice, Hartley v 65 

Ridgely, Blair v 285 

Ridgeway v. Underwood 123 

Roberts, Pillow v 281 

Roddy v. Stanley 90 

Rogers, Murphy v 59 

Rolfe v. Dolman . 76 

Rosen, U. S. v 246 

Rosenthal, Lynch v 69, 123, 124 

Rowland, Ex Parte 276 

Ruggles, Hull v 11, 15, 87, 111 

Rumsey v. Berry 33 

S 

Sandford, C. & L. T. Co. v\ 291 

Sauer, U. 'S. v 200 



xiv Table of Cases Cited. 

Saunders, Ogden v 281 

Schriber v. Rapp 174 

Schwinke, Western Star Lodge v : 260 

Scollans v. Flynn 51 

Segar, Stoddard v 125, 139, 141 

Seidenbender v. Charles 7, 15, 70, 120 

Seney, Korten v 11 

Shaw, State v 54, 189 

Sheriff, Com. v 70, 80 

Sherwood, Old Colony Co. v 161, 167 

Sherwood, National In. Co. v 168 

Shobert. Ex Parte 191 

Shorts, State v 7, 13, 15, 93, 109 

Shotwell, Wooden v 11, 15, 69, 117 

Simonds, Com. v 53 

Simmons, IT. S. v 237 

Slaughter House Cases 285 

Slenker, U. S. v 242 

Smelly, Monroe v 7 

Smetton. Tavlor v 15. 95, 96, 191 

Smith, Alvord v 21, 47, 48 

Smith v. State 11, 113 

Smith, U. S. v 222, 237, 242 

Society, Delier v 21 

Solomon v. State "11 

Southern M. In. Co 156 

Spalding v. Vilas 274 

Springer v. U. S . . 269 

Squires v. Whisken 51 

Stallings, Branham v 115 

Stanley, Eoddv v 90 

Staples. U. S. v "230 

State, Alexander v 62 

State, Allgeyer v 294 

State, Association v 15, 7(5, 83 

State. Bagley v 51 

State, Balloek v. 7, 15 

State, Bamble v 52 

State, Bavland v 11 

State, Bell v 11. 13, 42. 83. 85. 181. 186 

State v. Boniel : 70 

State v. Book 59 

State, Boyd v 76 

State v. Bryant 78b 

State, Buck v 11 

State, Buckalew v 177. 179. 18G 

State, Chavanah v 181, 191 

State, Cheesum v. . 51 

State v. Clark 11. 84 

State, Debay v." 61 

State, Dent v. 277 

State, Dunn v 70, 78a 

State, Edwards v 51 

State, Eubanks v 15. 42. 7S 

State, Fontenberry v 34 

State, France v. 13 

State, Gamble v 52 

State v. Grimes 187 

State v. Gupton . 64 

State, Hamilton v • 02 



Table of Oases Cited. xv 

State, Holman v 15. 80, 191 

State, Hudelson v 15, 83, 123, 134, 130 

State, Huff v 49 

State, Johnson v 51 

State, Kohshorn v 178 

State v. Leighton 59 

State, Loiseau v 11, 13, 177 

State, Long v 7, 74, 110 

State v. Lovell 102, 139, 143 

State v. Lumsden 11, 13, 191 

State v. Manser 59 

State v. Moren . 15, 184 

State v. Mumford 15, 83, 89 

State v. Overton 76 

State, Palmer v 49 

State, Quarles v 13 

State, Portis v 189 

State, Randall v 7, 15, 77 

State, Reeves v 186 

State v. Shaw 54, 189 

State, Shorts v 7, 13, 15, 93 

State, Smith v 11, 113 

State, Solomon v 11 

State, Stone v 305, 306 

State, Thomas v 15. 69. 191 

State, Ward v 59 

State, Walker v 59 

State v. Willis 15 

State. Wortham v 63 

State, Yellowstone Kit v 15, 118, 186 

Statesbv v. U. S 265 

St. Croix Mfg. Co., Dunham v 136, 137 

St. John Baptist Church, Dion v 175b 

Steele, Lawton v 209 

. Stickle, U. S. v 231 

Stimpson, Railroad v 266. 280 

Stoddard v. Segar 125, 139, 141 

Stokes, Kendall v 256, 267, 268, 274 

Stokes v. U. S. 220 

Stone v. New York 299 

Stone v. State 305, 306 

- Strader. Tatman v 51, 55 

Streep v. U. S 200, 224 

Swaine, B^ssell v 116 

Swearingen, U. S. v 242, 243 

Swigert v. People 52 

Swinke, Western Star Lodge v 260 

Sykes v. Beadon 164, 165, 175, 191 

Sykes, Gilbert v 65 

T 

Tatman v. Strader 51, 55 

Taylor, Bernard v 65 

Taylor, Com. v 59 

Taylor v. Smetton 15. 95, 96, 191 

Teal v. Felton 274, 286 

Thomas v. State, '. 15, 69, 98, 191 

Thomas, Tollett v. 51, 53, 101, 102, 139, 143 

Thompson, Boardman v. .' 283 

Thompson; Gaines v 265 



xvi Table of Cases Cited. 

Thornhill v. Orear 183 

Tilton, Com. v 51 

Tollett v. Thomas 51, 53, 101, 102, 139, 143 

Tontine Sav. Ass'n 103, 150, 151 

Tousley, Wilkinson v 51 

Trimble v. Hill 20 

Tuolumne Water Co.. Turner v 66 

Turner v. Water Co . . 66 

U 

Underwood, Ridgeway v 123 

Union In. Ass'n v. Lutz 147, 174 

Union R. L. R. Co., Noble v . 265 

U. S. v. Andrews 244 

U. S. v. Baskets Champagne 281 

U. S. v. Beach 224 

U. S. v. Beatty 19, 223 

U. S., Bennett v 242 

U. S. v. Black 276 

U. S. v. Boyle 237 

U. S., Brand v 216, 228 

U. S. v. Brown 238 

U. S. v. Burnell 237 

U. S., Cheatham v 279 

U. S. v. Chesman 242 

U. S., Choe Chan Ping v 277, 281 

U. S. v. Clark 242, 244 

U. S. v. Commissioners 254 

L. S. v. Davis 137 

U. S. v. Dodge 240 

U. S., Dunlop v 245 

U. S., Durland v 202 

U. S., Earnshaw v 282 

U. S., Elkiu v . 280 

U. S. v. Elliott 237 

U. S. v. Fay 205, 206 

U. S. v. Ferreira 261, 262 

U. S. v. Finney 229 

U. S., Fong Yue Ting v 281 . 

U. S. v. Fulkerson 7. 172 

U. S. v. Gee 239 

U. S., Grimm v 244 

U. S. v. Guthrie 268 

U. S. v. Haeflinger 219 

U. S., Harlen v 56 

U. S. v. Harman 242. 253 

U. S., Haynes v. 218 

U. S., Horner v. . .7, 11, 15, 70. 73, 170, 175, 191, 192. 249, 253 

U. S. v. Jarvis 244 

U. S. v. Jones 200, 214 

U. S. v. Jung Ah Lung 280 

U. S, v. Knox 272 

U. S. v. Lamar 275 

Xj. S. v. Lamkin 245 

U. S., Lansburg v 110 

U. S. v. Ling 244 

U. S. v. Loring 209 

IT. S. v. McDonald 44, 1 61, 166, 170 

U. S. v. Martin 244. 245 



Table of Cases Cited. xvii 

U. S. v. Mitchell 216 

U. S. v. Nathan 244 

U. S., Olney v 15, 114, 123, 184, 237 

U. S. v. Owens 217 

U. S., Passavant v 269, 282 

U. S. v. Politzer 190 

U. S. v. Reid 206, 207 

U. S., Rosen v 246 

U. S. v. Sauer 200 

U. S. v. Simmons 237 

U. S. v. Slenker -. 242 

U. S. v. Smith 222, 237, 242 

U. S., Springer v 269 

U. S. v. Staples 230 

U. S., Statesby v 265 

U. S. v. Stickle 231 

U. S., Stokes v 220 

U. S., Streep v 200, 224 

U. S., Swearingen v 242, 243 

U. S., Ting v 281 

U. S. v. Wallis 7, 73, 88, 172 

U. S., Ware v 273 

U. S. v. Warner 243 

U. S., Watson v 227 

U. S., Weiber v 221 

U. S. v. Wightman . 243 

U. S. v. Wilson 244 

U. S. v. Windom 278 

U. S. v. Wooten 213 

U. S. v. Zeisler 83 

V 

Vilas Spalding v 274 

Virginia, Phalen v 305 

W 

Wahl, Ex Parte 244 

Walker v. State 59 

Wallace, Lucas v 107 

Wallingford v. M. Soc 165 

Wallis, U. S. v 7, 72, 88, 172 

Ward v. State 59 

Ware v. V. S 273 

Warner, U. S. v 244 

Washington Glass Co. v. Mossbaugh 124 

Watson, U. S. v 227 

Weiber v. U. S 221 

Weithoff, People v 51 

Western Star Lodge v. Schwinke 260 

Whitely, Commissioner v 271, 313 

Whisken, Squires v. 51 

White, Harris v 21, 145 

Wightman, Tj. S. v 243 

Wilkes v. Dinsman 254 

Wilkinson v. Gill 7, 111 

Wilkinson v. Tousley 51 



xviii Table of Cases Cited. 

Willis, State v 15, 111 

Wilson v. Pearson 199 

Wilson, U. S. v 244 

Windom, U. S. v 278 

Wood, Holt v 108 

Wooden v. Shotwell . . 11, 15, 69, 117 

Wooten, U. S. v 213 

Wortham v. State 63 

Wright, Com. v 182, 191 

Yellowstone Kit v. State 15, 118, 186 

Wick Wo v. Hopkins 280 

Z 

Zumstein, Association v 287, 288, 291 

Ziebald, Kansas v 301 

Zeisler, U. S. v 83 



LOTTERIES IN THE MAILS, 



CHAPTER I. 

This chapter will embrace a historical sketch of lotteries 
in the United States and Europe together with the Anti Lot- 
tery Laws of Congress now in force. 

Section 1. The lottery, as a method of gambling, has 
prevailed from the remotest antiquity. It is not intended, 
however, at this time, to give even a general history of the 
lottery, bnt it will be sufficient for the purpose in view in this 
work to note, briefly, the evolution of the law of lotteries in 
modern times. Prior to the last decade of the Seventeenth 
Century, lotteries, public or private, were, it seems, not con- 
demned by law anywhere and the people operated them at 
pleasure, without let or hindrance, unless it was, in some 
countries, to obtain a license therefor. 

Sec. 2. The first lottery, authorized by law in England, 
was established in 1567 and in 1569 there were only three 
lottery offices in the kingdom. A lottery to aid in the coloni- 
zation of Virginia was authorized in 1612 in the reign of 
James I. Nothing probably shows the advance in public 
opinion on this method of gambling in the last three hundred 
years more than the fact that the first lottery, sanctioned by 
law in England, was drawn at the west door of St. Paul's 
Cathedral in London. But opposition to lottery gambling 
at last came in some degree and the Statute of 10 and 11 
William IU, C. 17, reciting that persons had fraudulently 
obtained large sums of money from the unwary by color of 
patents or grants under the Great Seal, licensing lotteries, 

1 



2 Lotteries, Frauds and Obscenity in the Mails. 

provided that all lotteries should thereafter be held as com- 
mon nuisances and all patents and grants for the same should 
be void and denounced penalties upon those who set up or 
operated lottery .schemes. The effect of this Statute was 
however, simply to deprive the king of the right to issue 
letters patent for lotteries, but the parliament, of course, 
possessed the power to authorize lotteries, either public or 
private. 

Genoa was the first of the nations to introduce the lottery 
as a source of revenue. France resorted to it for that pur- 
pose about the year 1580. An English Chancellor proposed 
the lottery for a long series of years as a justifiable measure 
of finance, on the principle of its being a voluntary tax, as- 
sumed by the adventurers. Ex-President Jefferson, in his 
memorial to the Virginia Legislature in 1826, stated that 
money, invested in a lottery, was a voluntary tax and Chan- 
cellor Kent, in 1839, thought the lottery was "a fair way to 
reach the pockets of misers and persons disposed to dissipate 
their funds." England, from 1709 to 1824, following the 
theory of her Chancellor of the Exchequer, alluded to above, 
established and maintained lotteries by law to raise revenue 
and, from 1793 to 1824, the government realized an average 
yearly profit of £346,765 by this method. The tickets were 
sold to contractors, who resold them at retail by "Morocco 
men" who traveled through the country. These state 
lotteries, conducted often fraudulently by the contractors, 
operated perniciously upon the morality of society and public 
opinion soon revolted against them. In 1808, the House of 
Commons appointed a committee to examine into the subject. 
While the report of this committee conclusively showed that 
lottery gambling was very extensive and very pernicious, the 
revenue obtained by the government was too great a tempta- 
tion to be long resisted and the State lottery was continued. 
In 1819, the question arose again and through the efforts of 
Lyttleton, Buxton, Wilberforce, Canning and Castlereagh, 
measures were adopted to suppress the state lottery, the last 
drawing in which occurred in October, 1826. By a blunder 



Lotteries, Frauds and Obscenity in the Mails. 3 

in legislation, however, authority was given by the Act 1 and 
2, Will. IV, Ch. 8, to hold a lottery for the improvement of 
the city of Glasgow, but these "Glasgow Lotteries/ 7 as they 
were called, were abolished by the Act 4 and 5, Will IV, 
Ch. 37. 

But owing to the supposed good effects of encouraging 
art, what were known as "Art Unions" were exempted from 
penalties by 9 and 10 Yic. C. 48, and in consequence of these 
exemptions the evil of lottery gambling has been renewed in 
another form and gift concerts, Art Unions, etc., still exert a 
baleful influence on public morals in England. 

"In the Italian republics of the 16th Century, the 
lottery principle was applied to encourage the sale of mer- 
chandise." Charles Knight, in his history of England, says 
that in 1710 the newspapers were "full of the most curious 
advertisements. The projectors of schemes to make all men 
suddenly rich — the managers of fraudulent insurances — the 
sellers of state jewelry by lottery — all these and many others, 
who traficed in human credulity, were exceptions to the general 
spirit of the English Tradesmen." 

Francis I granted the first letters patent for a lottery in 
France, and in 1656, Tonti (the originator of Tontines) opened 
a lottery for the building of a bridge between the Louvre and 
the Foubourg St Germain. It was said France raised enough 
money by lotteries to defray the expenses of the war of the 
Spanish Succession. Lotteries were established in France, 
also, for^the benefit of religious communities and for charity 
purposes. All these were practically merged in the Lotterie 
Royale by the famous decree of 1776, which suppressed private 
lotteries. These lotteries had a demoralizing influence on 
French society, and in 1836, France enacted a general law 
prohibiting all lotteries. The other countries of continental 
Europe also suppressed private lotteries, but in Germany, 
Austria, Spain, Holland, Italy and Denmark the State lottery 
still appears as a powerful and reliable means of revenue. 

What are denominated lottery bonds, the nature of which 
mil be hereafter examined fully, were formerly resorted to by 



4 Lotteries, Frauds and Obscenity in the Mails. 

the nations above named and are yet by all except France, 
England and Italy. The Societe dn Foncier, the city of Paris 
and many of the municipal governments of Europe have au- 
thority now to negotiate and do negotiate such bonds. Mr. 
Henri Levy-Ullmann, in an article in the 9th Yol. of the 
Harvard Law Review, 392, says that these "lottery bonds are 
popular with the public which is greedy for all transactions of 
chance; the greater the chance the greater the number of 
speculators." 

Sec. 3. The history of lotteries in the United States is 
substantially the same as that in England. Many of the 
colonies, prior to the Revolutionary War, passed laws for- 
bidding private lotteries, but as was done in England, many 
lotteries were established by law. The State of New York, 
in 1721, prohibited all lotteries not licensed by the Govern- 
ment. In 1783, another act to the same effect, though more 
stringent, was passed, forbidding private lotteries and gave the 
State a monopoly of the business. From that time to 1821 
no less than forty-four acts were passed establishing lotteries 
for raising public revenues. Under these acts money was 
raised for opening and improving roads, for improving the 
navigation of the Hudson river, for Orphan assylums, boards 
of health, and lotteries were favorite means, also, for raising- 
money for educational purposes. This mixture of morals and 
lotteries and the elevation of one by means of the other con- 
tinued in New York until the adoption of the Constitution of 
1821 which contained the provision that "no lotteries shall 
hereafter be authorized in this State." 

Notwithstanding public opinion seems to have been crys- 
talizing, during the first quarter of the present century, for the 
overthrow and suppression of all lotteries in this country as 
well as in England, Mr. Tyson, in his work on lotteries in the 
United States says that "in 1833 there were 420 schemes 
operated by 200 offices in Philadelphia." These offered prizes 
to the amount of $53,136,930; seventy-three of these were in 
New York, sixty-five in Virginia, eighty-one in Connecticut," 
sixty-two in Rhode Island, thirty-four in Delaware and North 



. Lotteries, Frauds and Obscenity in the Mails. 5 

Carolina (joint grants), seventeen in Maryland, twenty-nine in 
Delaware, etc., etc. These were all illegal except twenty-six 
operated by the Union Canal Company, and Mr. Jefferson, 
in his memorial to the Virginia Legislature, gives the names of 
seventy acts of the legislature of that State prior to 1820, au- 
thorizing lotteries for all sorts of purposes. 

The first attempts to suppress lotteries in most of the 
States were by legislation simply, but it was found, however, 
that laws forbidding lotteries that could be repealed, or that did 
not bind subsequent legislatures, were not effective, and at this 
time all the States have adopted constitutional provisions 
prohibiting the licensing or authorization of lotteries. The 
last great struggle with the lottery monster was between the 
state of Louisiana and the Louisiana Lottery Company, but 
the moral sentiment of the State triumphed over this great 
vice and in 1893 the charter of that company expired and it 
was forced to quit business. Lotteries, in that State, are now 
prohibited by a constitutional provision. 

While the opposition to lottery gambling was later taking 
form in the United States than in England the work finally 
accomplished here was decidedly more thorough than there, 
for the constitutional provisions of the States and the legisla- 
tion of Congress have been so construed as to bring "Gift Con- 
certs" and "Art Unions" within them. 

It must not be supposed, however, that constitutions and 
laws could kill either the gambling spirit or gambling habit; 
all they could do or have done is to suppress gambling under 
the name of lottery. The avowed lotteries under the opera- 
tion of these constitutions and laws have disappeared but gift 
enterprises under various alluring names and disguises flourish 
even to-day not only in the large cities but also in the smaller 
towns and hamlets throughout our country. 

On the suppression of avowed lotteries in the United 
States, that species of gambling, at once, increased enormously 
in Old Mexico and Hondurous. Indeed the Louisiana Lottery 
was transplanted to Honduras and under another name (The 
Hondurous Lottery) has done and is probably doing a large 



6 Lotteries, Frauds and Obscenity in the Mails. 

business now in this country. Lottery gambling was extensive 
in Cuba when our Government took possession but it has been 
suppressed as far as it is practicable to suppress it by law. 

Sec. 4. On the first day of November, 1775, the Am- 
erican Congress adopted the following resolution: "Resolved, 
That a sum of money be raised by way of lottery for defraying 
the expense of the next campaign, the lottery to be drawn in 
Phila." 1 Jour., Am. Con. 535. November, 1776, the Con- 
gress declared, by resolution, the scheme of the same lottery to 
be that 100,000 tickets should be issued and that the prizes 
to be drawn should amount in the aggregate to $50,000,000;. 
and the Government was to get fifteen per cent of the money 
raised by the sale of tickets. The managers of the lottery 
were selected November 20, 1776. The proceedings of Con- 
gress show further action in regard to this lottery from 1778 
to 1786, but it is probable the scheme did not work satisfac- 
torily or beneficially, for after 1786 nothing more is heard 
of it. 

As an inducement to negotiate the loan of $800,0.00, 
authorized by the Colonial Congress, of September 26, 1779, 
in addition to the four per cent interest which was to be paid, 
it was agreed to distribute among the subscribers, by lot, 
"obligations' 7 of the United States for $276,000, as a bonus 
or premium on the loan; and as an additional inducement, 
"gratifications" amounting to from five or six per cent were to 
be paid at the time of redemption, to the holders of the original 
certificates. The certificates for this loan were identical, in 
principle, with the lottery or premium bonds negotiated by 
European governments and cities. 

Two lotteries authorized by the State of Maryland in 
November, 1795,, for the purpose of raising $52,500, were 
legalized by Congress, in the District of Columbia, by Act of 
May 6, 1812 (2 Stat. L. 728). 

Congress does not seem to have authorized any other lot- 
tery scheme until 1812, when, in providing for the municipal 
government- of Washington City, authority was given that city 



Lotteries, Frauds and Obscenity in the Mails. 7 

to operate a lottery scheme for the improvement of its streets, 
etc. (2 Stat. L. 720-6). 

By the Act of Congress of May 15, 1820, providing for the 
government of Washington City, all acts in relation to lot- 
teries, then in existence, were repealed but authority was given 
by that act to the city to operate a lottery for ten years for 
public purposes. This authority, not having been in the mean- 
time renewed, expired by limitation May 15, 1830. 

The Act of Congress of February 22, 1827 (4' Stat. L. 
105), authorized the City of Washington to include lands of 
Thomas Jefferson in its lottery schemes. 

This terminated the affirmative legislation of the Federal 
Government in favor of lotteries though Congress for a long 
time after 1827 taxed lottery schemes, operated under State 
authority. 

In the article, "Lotteries," by Dr. W. C. Smith, in the 
Encyclopaedia Britannica, it is stated, "before 1820 at least 
seventy acts were passed by Congress authorizing lotteries for 
various public purposes, such as schools, roads, etc., about 
eighty-five per cent of the subscription being returned in 
prizes." This is manifestly an error. Dr. Smith, in his state- 
ment, was evidently relying on Mr. Jefferson's memorial to 
the Virginia Legislature in 1826, praying for authority to 
establish a lottery for the sale of his property, in which he 
says that from 1782 to 1820 no less then seventy acts were 
passed "by the Legislature" authorizing lotteries for various 
purposes. Mr. Jefferson meant the Legislature of Virginia, 
while Dr. Smith must have thought he meant the National 
Legislature and hence, his mistake, which was natural enough 
for one not familiar with our dual system of Government. 

The war waged on lotteries during the first quarter of the 
present century had the effect, not only, to prevent affirmative 
legislation in their favor but to encourage legislation by 
Congress forbidding them. 

Sec. 5. The first act of Congress against lotteries was that 
of March 2, 1827 (4 Stat. L. 238), section 6 of which provided: 
"That no postmaster or assistant postmaster shall act as agent 



8 Lotteries, Frauds and Obscenity in the Mails. 

for lottery offices or under any color of purchase, or otherwise, 
send lottery tickets; nor shall any postmaster receive free of 
postage or frank lottery schemes, circulars or tickets." 

The vending of lottery tickets, in the District of 
Columbia, was prohibited by Act of August 31, 1842, ex- 
cept such as had been authorized by the City of Alexandria for 
one year. (5 Stat. L. 578). 

The next act, in its order, was that of July 27, 1868, 
section 13 of which provided: "That it shall not be lawful to 
deposit in a postofnce, to be sent by mail, any letters or circu- 
lars concerning lotteries, so-called gift concerts or similar en- 
terprises, offering prizes of any kind on any pretext whatever." 
(15 Stat. L. 194-196.) This act was found to be a dead letter, 
because no provision was made for enforcing it, and more 
radical measures were adopted by the Act of June 8, 1872 
(17 Stat. L. 283). Section 149, of that act, which is now 
section 3894, Revised Statutes, made it unlawful to convey by 
mail or to deposit in a postoffice to be sent by mail, any letters 
or circulars concerning illegal lotteries, so-called gift concerts, 
or other similar enterprises. 

Section 300, which is now sections 3929 and 4041, Re- 
vised Statutes, authorized the Postmaster-General to issue 
a fraud order against anyone found by him to be conducting 
through the mails "any fraudulent lottery, gift-enterprise, or 
scheme for the distribution of money or any real or personal 
property, by lot, chance or drawing of any kind." 

By the act of July 12, 1876 (19 Stat. L. 90), the 
word "illegal" was stricken out of section 149 (section 3894, 
R. S.), but the word "fraudulent" still remained in section 
300 (sections 3929 and 4041, R. S.) and in construing these 
laws Attorney-General McVeagh, on April 27, 1881 (17 Op. 
Atty. Gen. 77), v held that the Postmaster-General must find, 
before he could issue a fraud order against a lottery promoter, 
that the person, against whom it was to operate, was con- 
ducting through the mails a fraudulent lottery scheme but 
when he found that fact, he could issue the order, though 
the scheme was operated by state authority. And he further 



Lotteries, Frauds and Obscenity in the Mails. 9 

held that a newspaper, containing a lottery advertisement, was 
not thereby rendered non-mailable by the law then in force. 

By the Act of September 19, 1890 (26 Stat. L. 465) the 
law was so amended as to include newspapers, and the words 
"offering prizes dependent upon lot or chance" were inserted 
after "enterprise" therein, and the word "fraudulent" was 
stricken out of sections 3929 and 4041. 

Under all these laws the department uniformly held that 
an ordinary letter or packet, under seal, must be delivered 
according to the directions thereon, though the addressees were 
known to be conducting lotteries or fraudulent schemes. There 
are not now and never have been any restrictions upon the 
operators of these schemes in the sending of mail matter by 
them, and they could always reach the people through the 
mails; and the result was that they had money remitted to 
them by express orders or bank checks in ordinary letters, 
under seal, and they continued to run their schemes wide open, 
though orders stood against them forbidding the delivery 
of registered letters and the payment of money orders to 
them. 

To remedy this manifestly weak point in the law, the Act 
of March 2, 1895, was enacted (Acts 1894-95, 963), by 
which the power of the Postmaster-General relating to reg- 
istered letters was extended to ordinary mail matter under 
seal. 

LAWS OF CONGRESS AS THEY STAND AT PRESENT. 

Sec. 6. Sections 3894, 3929 and 4041, E. S. of the 
United States, as amended by the Statute of September 19, 
1890, Ch. 908, are as follows: 

Sec. 3894. "No letter, postal card, or circular 
concerning any .lottery, so-called gift concert, or 
similar enterprise offering prizes dependent upon lot or 
chance, or concerning schemes devised for the purpose of 
obtaining money by false pretenses, and no list of the drawings 
at any lottery or similar scheme,, and no lottery ticket or 
part thereof, and no check, draft, bill, money, postal note, or 



10 Lotteries, Frauds and Obscenity in the Mails. 

money order, for the purchase of any ticket, tickets, or part 
thereof, or of any share or any chance in any such lottery or 
gift enterprise, shall be carried in the mail or delivered at or 
through any postoffice or branch thereof, or by any letter-car- 
rier; nor shall any newspaper, circular, pamphlet, or publica- 
tion of any kind containing any advertisement of any lottery or 
gift enterprise of any kind offering prizes dependent upon lot or 
chance,or containing any lists of prizes awarded at the drawing 
of any such lottery or gift enterprise, whether said list is of 
any part or of all of the drawing, be carried in the mail or be 
delivered by any postmaster or letter-carrier. Any person 
who shall knowingly deposit or cause to be deposited, or who 
shall knowingly send or cause to be sent, anything to be 
conveyed or delivered by mail in violation of this section, or 
who shall knowingly cause to be delivered by mail anything 
herein forbidden to be carried by mail, shall be deemed guilty 
of a misdemeanor, and on conviction shall be punished by a 
fine of not more than $500 or by imprisonment for not more 
than one year, or by both such fine and imprisonment for each 
offense. Any person violating any of the provisions of this 
section may be proceeded against by information or indictment 
and tried and punished, either in the district at which the 
unlawful publication was mailed or to which it is carried by 
mail for delivery according to the direction thereon, or at which 
it is caused to be delivered by mail to the person to whom it 
is addressed. 

Sec. 3929. The Postmaster-General may, upon 
evidence satisfactory to him that any person or company 
is engaged in conducting any lottery, gift enterprise, or scheme 
for the distribution of money, or of any real or personal prop- 
erty by lot, chance or drawing of any kind, or that any person 
or company is conducting any other scheme or device for 
obtaining money or property of any kind through the mails by 
means of false or fraudulent pretenses, representations, or 
promises, instruct postmasters at any postoffice at which reg- 
istered letters arrive directed to any such person or company, 
or to the agent or representative of any such person or com- 



Lotteries, Frauds and Obscenity in the Mails. 11 

pany, whether such agent or representative is acting as an in- 
dividual or as a firm, bank, corporation, or association of any 
kind, to return all such registered letters to the postmaster at 
the postomce at which they were originally mailed, with the 
word 'Fraudulent' plainly written or stamped upon the out- 
side thereof ; and all such letters so returned to such postmasters 
shall be by them returned to the writers thereof, under such 
regulations as the Postmaster-General may prescribe.. But 
nothing contained in this section shall be so construed as to 
authorize any postmaster or other person to open any letter 
not addressed to himself. The public advertisement by such 
person or company so conducting such lottery, gift enterprise, 
scheme, or device, that remittances for the same may be made 
by registered letters to any other person, firm, bank, corpora- 
tion, or association named therein, shall be held to be 'prima 
facie evidence of the existence of said agency by all the par- 
ties named therein; but the Postmaster-General shall not be 
precluded from ascertaining the existence of such agency in 
any other legal way satisfactory to himself. 

Sec. 4041. The Postmaster-General may, upon evidence 
satisfactory to him that any person or company is engaged 
in conducting any lottery, gift enterprise, or scheme for the 
distribution of money or of any real or personal property by 
lot, chance, or drawing of any kind, or that any person or com- 
pany is conducting any other scheme for obtaining money or 
property of any kind through the mails by means of false or 
fraudulent pretenses, representations or promises, forbid the 
payment by any postmaster to said person or company of any 
postal money orders drawn to his or its order or in his or its fa- 
vor, or to the agent of any such person or company, whether 
such agent is acting as an individual or as a firm, bank, corpo- 
ration or association of any kind, and may provide by regula- 
tion for the return to the remitters of the sums named in such 
money orders. But this shall not authorize any person to open 
any letter not addressed to himself. The public advertisement 
by such person or company so conducting any such lottery, gift 
enterprise, scheme, or device, that remittances for the same 



12 Lotteries, Frauds and Obscenity in the Mails. 

may be made by means of postal money orders to any other 
person, firm, bank, corporation or association named therein 
shall be held to be prima facie evidence of the existence of 
said agency by all the parties named therein; but the Post- 
master-General shall not be precluded from ascertaining the 
existence of such agency in any other legal way." 

The first section of the act of Congress of March 2, 1895 
(Acts 1894-5, page 963), made it a criminal offense for any 
one to "cause to be brought within the United States from 
abroad, for the purpose of disposing of the same, or deposited 
or carried by the mails of the United States, or carried from 
one State to another in the United States, any paper, certificate 
or instrument purporting to be or represent a ticket, chance, 
share or interest in or dependent upon the event of a lottery, 
so-called gift concert, or similar enterprise, offering prizes 
dependent upon lot or chance, or shall cause any advertisement 
of such lottery, so-called gift concert, or similar enterprise, 
offering prizes dependent upon lot or chance, to be brought 
in the United States, or deposited in or carried by the mails 
of the United States,or transferred from one State to another?" 

And the fourth section of the same act provides: "That 
the powers conferred upon the Postmaster-General by the 
statute of eighteen hundred and ninety, chapter nine hundred 
and eight, section two, are hereby extended and made appli- 
cable to all letters or other matters sent by mail." 



CHAPTEK II. 

The discussion in this chapter will embrace the definition 
and, under that head, the essential and non-essential elements 
of a lottery scheme. The subject of "Prizes dependent upon 
lot or chance" will also be fully examined in the light of gam- 
bling transactions other than lotteries. 

THE DEFINITION OF LOTTERY. 

Sec. 7. Before proceeding to the discussion of this sub- 
ject, the general rules, which have been applied by the courts 
in the interpretation of lottery schemes, will be briefly 
noticed. 

In the American and English Encyclopaedia of Law, 
Vol. 13, p. 1178, this general statement is to be found: 

"Many ingenious devices have been resorted to in at- 
tempting to evade the laws for the suppression of lottery 
schemes. The courts, however, have generally construed the 
purposes and results of these subterfuges with much strict- 
ness, and in almost every case they have been held to be in vio- 
lation of the terms and meaning of those statutes for the pre- 
vention of lottery practices." 

In U. S. vs. Wallis, 58 Fed. Eep. 942, the court said: 

"The sjtatute is directed against the use of the mails for 
the conveyance of any advertisement of 'any lottery or gift 
enterprise of any kind.' This language is sufficiently com- 
prehensive to include any scheme in the nature of a lottery. 
* * * * It may be sufficient to say that this embraces the ele- 
ments of procuring through lot or chance, by the investment 
of a sum of money or something of value, some greater 
amount of money or thing of greater value. When such are 
the chief features of any scheme, whatever it may be chris- 

13 



14 Lotteries, Frauds and Obscenity in the Mails. 

tened or however it may be guarded or concealed by cunningly 
devised conditions or screens, it is under the law a lottery." 

In Eandall vs. State, 42 Texas, 585, the court remarked 
that "Courts will not inquire into the name but determine the 
character of the transaction or business in which parties are 
engaged." 

It was said in Long vs. State (74 Md. 565-572) to be a 
valid exercise of power in a State to protect the morals and 
advance the welfare of the people by prohibiting every scheme 
and device bearing any semblance to lottery or gambling. 

The Supreme Court of the United States in the Horner 
case, 147 U. S. 449, expressly gave its assent to the statement 
made in Commonwealth vs. The Sheriff, 10 Phila. Eep. 203, 
to the effect that whatever amounted to a distribution of prizes 
by lot was a lottery no matter how ingeniously the object of 
it might be concealed. And the same court quoted, with ap- 
proval, the following language of the Maryland Court of 
Appeals in Ballock vs. State, 73 Md. 1: 

"Our statute does not justify a court expressly directed to 
so construe the law as to prevent every possible evasion, 
whether designedly or accidentally adopted, in deciding a 
thing is not a lottery simply * * * because it lacks some 
element of a lottery according to some particular dictionary's 
definition of one, when it has all the other elements, with all 
the pernicious tendencies, which the State is seeking to pre- 
vent." 

"The courts have uniformly looked beyond the mere form 
or device of the transaction and sought out and suppressed the 
substance itself." Wilkinson vs. Gill, 74 K Y. 73. 

"When such are the chief features of any scheme, what- 
ever it may be christened or however it may be guarded or 
concealed by cunningly devised conditions or screens, it is, 
under the law, a lottery." U. S. vs. Fullerton, 74 Fed. Eep. 
619. "But the law regards not mere semblance but the sub- 
stance of things, and consequently these devices, however in- 
genious, can not be successful." State vs. Shorts et al., 3 



Yroom, 398. 



Lotteries, Frauds and Obscenity in the Mails. 15 

Justice Gibson, in meeting the contention in the case of 
Seidenbencler vs. Charles, 4 Sergeant and Bawle, 151 (8 Am. 
Dec. (loc. cit.) 688), that the act of the Province of Pennsyl- 
vania of 1762, which declared all lotteries to be public nui- 
sances, applied only to lotteries concerning personal property 
and not to land lotteries, used this language: "I grant the 
legislature may not have had this particular kind of lottery in 
view; but was it intended to restrain the operation to those 
particular kinds of lotteries then in use, and to those only? 
I apprehend not. It is very clear that a particular kind of 
mischief, differing not in form or substance, but in degree 
on]y, from the one under consideration, and only less perni- 
cious in its consequences, first induced the legislature to act 
on the subject. Shall the letter, which is sufficiently com- 
prehensive to embrace this case, be restrained to the particular 
mischief then existing, and exclude one of the very same 
stamp, merely because it was not then practiced? This surelv 
would not be a sound construction." 

Judge Bell expresses the same thought in Monroe vs. 
Smelly, 25 Texas Kep. 586 (78 Am. Eeps. 541). In discus- 
sing the question of what is a wager at common law and the 
exceptions to the general rule Judge Bell said: 

"And it is perhaps the greatest glory of the common law 
that it is, in its truest sense, both conservative and progressive 
in its tendencies. The exceptions to the general rule of the 
common law on the subject of wagers fall into two classes : One 
class is based upon a concern for the interest of the public; 
the other i$ based upon a concern for the interests and feelings 
of individuals. In a merely political sense, a thing may be 
said to be contrary to public policy in one generation, 
* * which is not so in the next. And when the law 
institutes an inquiry into the morality or immorality of a par- 
ticular thing, the inquiry does not proceed upon abstract prin- 
ciples so much as upon the received and common opinion of the 
great body of the people, constituting the political community, 
upon which the law has its operation. So a thing, in contem- 
plation of law, may be immoral to-day which was not immoral 



16 Lotteries, Frauds and Obscenity in the Mails. 

fifty years ago. That may be held to be in strict conformity 
with sonnd morals, according to the public sense of the pres- 
ent day, which would have been condemned as immoral during 
the ascendency of the Puritans in England, and of the Cove- 
nanters in Scotland." 

Sec. 8. Guided by these general rules for the interpreta- 
tion of a lottery scheme, we will now proceed to inquire into 
the nature of such a scheme and ascertain and state as near as 
may be a definition of it, and especially a definition of it as 
used in the Anti-Lottery Act of Congress of September 19, 
1890. 

Sec. 9. While it appears the Anti-Lottery Act of Sep- 
tember 19, 1890 is not artistically or scientifically drawn and 
while we find the words "so called gift concert 79 in one portion 
of the act, and "gift enterprise" and "gift enterprise of any 
kind" in other portions of the same act, and in two places we 
find the words "offering prizes dependent upon lot or chance' ' 
and in other places the phrase "the distribution of money or 
of any real or personal property by lot or chance or drawing 
of any kind/ 7 yet it is thought it may be safely assumed, taking 
the whole act together, that these different expressions are used 
interchangeably and that the words "so-called gift concert," 
"gift enterprise" and "gift enterprise of any kind" mean the 
same thing and that in them is included every scheme where 
prizes, dependent upon chance, are offered, in the guise of 
gifts or donations, in connection with some enterprise or bus- 
iness, either legitimate or illegitimate, and it will be assumed 
that the phrases, "offering prizes dependent upon lot or 
chance" and "the distribution of money or of any real or per- 
sonal property by lot, chance or drawing of any kind" mean 
the same thing; and the phrase "offering prizes dependent 
upon lot or chance" will be alone used hereafter as embodying 
the whole meaning of the other phrase. 

Sec. 10. In the American and English Encyclopaedia 
of Law, it is stated that, "A lottery is a sort of gaming con- 
tract, by which for a valuable consideration, one may, by favor 



Lotteries, Frauds and Obscenity in the Mails. 17 

of the lot, obtain a prize of a value, superior to the amount 
or value of that which he risks." 

Mr. Bishop in his Work on Statutory Crimes (sec. 952), 
defines a lottery to be, "Any scheme whereby one, in paying 
money or other valuable thing to another, becomes entitled 
to receive from him such return in value or nothing as some 
formula of chance may determine." 

Sec. 11. The following definitions of "lottery", have 
been given by the courts : 

"Lottery, in its popular acceptation, is a distribution of 
prizes by lot or chance ; and when the chances are sold and the 
distribution of prizes determined by lot, this constitutes a lot- 
tery." Buck vs. State, 62 Ala. 434; Solomon vs. State, Id.83. 

"The generally accepted definition of a lottery is that it is 
a scheme for the distribution of prizes for the obtaining of 
money or goods by chance." People vs. Noelke, 94 ~N. Y. 
137. 

"Any device, whereby money or any other thing is to be 
paid or delivered on the happening of any event or contin- 
gency in the nature of a lottery, is a lottery ticket." Smith 
vs. State, 68 Md. 170; Bayland vs. State, 69 Md. 170. 

"A lottery is a scheme, device or game of hazard 
whereby, for a smaller sum of money, or other thing of value, 
the person dealing therein, by chance or hazard or contin- 
gency, may or may not get money or other thing of value, of 
greater or less value, or in some cases of no value at all, from 
tha owners or managers of such lottery." State vs. Lumsden, 
89 K C. 572. 

"Whatever may be the name or character of the ma- 
chine or scheme, if in its use a consideration is paid and there 
is gambling, the hazarding of small amounts to win larger, the 
result of winning or losing to be determined by chance in 
which neither the will nor skill of man co-operates to influence 
the result, it is a determination by lot." Loiseau vs. State, 
22 So. Eep. 138. 

2 



18 Lotteries, Frauds and Obscenity in the Mails. 

Attorney-General Harmon, in his opinion given the Post- 
master General, in February, 1896, 21 Op. Att'y Gen. 313, 
furnishes an excellent definition of lottery as follows: "But 
the name lottery,' which originally implied casting of lots, 
now covers any determination of gain or loss by the issue of 
an event which is merely contrived for the occasion." 

"A lottery is a scheme by which some result is reached, 
by some action or means taken, and in which result man's 
choice or will has no part, nor can human reason, foresight, 
sagacity or design enable him to know or determine such 
result until the same has been accomplished." 

People v. Elliott (Mich.), 3 Law. Eep. Ann. (loc. cit.) 
405. 

"A lottery is a game of hazard in which small sums are 
ventured for the chance of obtaining a greater." Bell vs. 
State, 5 Sneed, 507. 

"A contrivance for the distribution of prizes by chance; 
a reliance upon the result of hazard; a decision of the adven- 
turer's investment of the favors of fortune is a lottery." 
Wooden vs. Shotwell, 23 N". J. L. 465; 24 Id. 789. 

"Where a valuable consideration is paid and it is deter- 
mined by lot or chance, according to some scheme held out 
to the public, what the party who paid the money is to have 
for it or whether he is to have anything, it is a lottery." State 
vs. Clark, 33 K. H. 335; Hull vs. Buggies, 56 K Y, 427. 

The Supreme Court of the United States, in the Horner 
case, 147 II. S. 449, in passing upon what is a lottery, said: 

"In the Century Dictionary under the word lottery is the 
following definition : ' A scheme for raising money by selling 
chances to share in a distribution of prizes; more specifically, 
a scheme for the distribution of prizes by chance among per- 
sons purchasing tickets, the corresponding numbered slips or 
lots, representing prizes or blanks, being drawn from a wheel 
on a day previously announced in connection with the scheme 
of intended prizes. In law the term lottery embraces all 
schemes for the distribution of prizes by chance, such as policy 
playing, gift exhibitions, prize concerts, raffles at fairs, etc., 



Lotteries, Frauds and Obscenity in the Mails. 19 

and includes various forms of gambling.' . * * * In. 
Webster's Dictionary 'lottery' is defined as 'A distribution of 
prizes by lot or chance.' In Worcester's Dictionary it is de- 
fined as 'A distribution of prizes and blanks by chance; a game 
of hazard, in which small sums are ventured for the chance 
of obtaining a larger value, either in money or in other arti- 
cles.' * * * In the Imperial Dictionary the word is de- 
fined thus, 'Allotment or distribution of anything by fate or 
chance; a procedure or scheme for the distribution of prizes 
by lot; the drawing of lots. In general lotteries consist of a 
certain number of tickets drawn at the same time, some of 
which entitle the holders to prizes, while the rest are blanks.' " 

In Korten vs. Seney, 68 N". W. Rep. 824. the Supreme 
Court of Iowa said : "Both upon reason and authority, a lottery 
is a game — a game of chance. Bish. Stat. Crimes, Sec. 952; 8 
Am. and Eng. Ency. Law, 993, and authorities cited. * * * 
It is said that money so paid for tickets is not laid, staked or 
bet. One of the definitions of the word 'lay' is 'to risk.' 
Money paid for lottery tickets is risked on the chances of suc- 
cess at the drawing. To stake money is to put it at hazard 
on the issue of competition or upon a future contingency. 
Money paid for lottery tickets is staked in a game of chance." 
In this case the raffle never came off, but the court held that 
that made no difference, remarking that "the notes were as 
void before the time the lottery was to take place as they would 
have been afterwards." 

Sec. 12. These definitions, given by the courts, text 
writers and lexicographers, fail to make the meaning of lot- 
tery clear and unambiguous. These definitions, in their last 
analysis, are tantamount to the statement that a lottery is a 
scheme in which the promoter, for a valuable consideration, 
distributes prizes to the adventurers by lot or chance, and this 
adds but little to mark the limitations and Hx the scope of 
the words of the Anti-Lottery Act of Congress, "any lottery, 
so-called gift concert or similar enterprise offering prizes de- 
pendent upon lot or chance." 



20 Lotteries, Frauds and Obscenity in the Mails. 

The courts and text writers have contented themselves 
with treating the subject as a whole and hence there has been 
no philosophical discussion or investigation of the separate el- 
ements necessary to constitute a lottery scheme. This is at- 
tributable, in a large degree, to the fact that, until within the 
last few years, there have existed in this and other countries 
authorized lotteries and even now such lotteries exist in many 
countries and hence few questions involving the essential ele- 
ments of a lottery scheme have been pressed before the courts. 
But now that all lotteries and similar enterprises in the United 
States have been made illegal and void by the constitutions of 
the several States and by Federal Statutes, the gamblers have 
lately sought and will in the future continue to seek to evade 
these constitutions and statutes by ingenious devices and sub- 
terfuges under alluring and misleading names so that those 
who are clothed with authority and jurisdiction to enforce the 
law will be called upon, indeed have been already to a limited 
extent called upon, to examine more critically into the nature 
and necessary elements of a lottery scheme or similar enter- 
prise than in former years ; and hence it is deemed best, in this 
work, to treat the essential elements of such a scheme or enter- 
prise separately and as far as practicable ascertain and state the 
limitations, scope and meaning of such elements. These ele- 
ments are: 1, A wager; 2, a valuable consideration; 3, a 
prize, and, -4, lot or chance, and the investigation of these ele- 
ments separately will be made in the order thus given. 

A WAGER. 

Sec. 13. A lottery scheme necessarily involves the ele- 
ment of a wager, 

A lottery is called "a game of hazard" in Worcester's 
Dictionary, in Kee's Cyclopaedia, in Bell vs. State, 5 Sneed 
(Term.), 507, in France vs. State, 6 Baxter (Tenn.), 478, and 
in State vs. Lumsden, 89 N .C. 572; "A sort of gambling 
contest," in the American and English Encyclopaedia of Law; 
"A gambling by lot," in Loiseau vs. The State, 22 So. Eep. 
138; and "a game of chance" in State vs. Shorts, 3 Vroom,398. 



Lotteries, Frauds and Obscenity in the Mails. 21 

In fact this proposition is so well settled that it would be a 
waste of time to review the authorities in support of it. It is 
of the utmost importance, however, to keep in mind this im- 
portant element of a lottery because, in many cases, as will ap- 
pear later on, it will be found it is the element by which alone 
a lottery scheme can be distinguished from a legitimate busi- 
ness transaction. 

A wager is denned to be a "contract by which two or more 
parties agree that a certain sum of money or other thing shall 
be paid or delivered to one of them on the happening of an 
uncertain event." Black's Law Dictionary, Title "Wager;" 
2 Bouvier's Dictionary, Title, "Wager." 

"A wager is something hazarded on the issue of some un- 
certain event; a bet is a wager." Quarles vs. State, 5 Humph. 
561, 

The true nature of a wager will be fully examined when 
we come to treat of the subject of "Prizes dependent upon 
lot or chance" and it is not deemed necessary to devote more 
space to it at this point. 

THE CONSIDEEATIOX. 

Sec. 14. The consideration for the offer of prizes de- 
pendent on lot or chance must be a valuable one. Ordinarily 
there is little difficulty in determining what is a valuable con- 
sideration in its application to the common business transac- 
tions of the people, but there has been considerable discussion 
and some contrariety of opinion in the courts in its application 
to lottery schemes. In regular lotteries, where tickets are 
sold and nothing else is sold or given in connection with them, 
there is no question about the consideration being valuable. 
But in many schemes some articles of property and a chance in 
a lottery are sold in connection with each other. In that case, 
it was for a long time strenuously contended that there was no 
consideration for the chance, especially where the articles were 
sold at their regular retail prices. This contention, however, 
has been held untenable by all the Courts so long and so often 



22 Lotteries, Frauds and Obscenity in the Mails. 

that the question may be deemed settled and at rest. It is 
universally held, now, that the adventurer buys and pays for 
both the article and the chance in the lottery, and hence a 
valuable consideration for the chance exists. The same idea 
is expressed by some of the courts by the statement that the 
offer of prizes acts as an inducement to purchasers to buy the 
articles. 

Sec. 15 There is another class of cases where no money 
or property is directly asked or given, but where the promoters 
offer chances for prizes to adventurers who are required to do 
some ix?t or perform some service which the promoter hopes 
and expects will result in the increase of the profits of his 
business and which will, therefore, indirectly benefit him finan- 
cially. The Postoffice Department has been called upon for 
several years pasi to decide whether there existed a valuable 
consideration or not in this class of business enterprises. One 
party, without charge, distributed promiscuously to the people, 
numbered cards on which it was stated that he would, at cer- 
tain times, place in his show windows many full suits of clothes 
having numbered labels on them and the parties holding cards 
with numbers corresponding with the numbers on the suits of 
clothes should have the clothes. Another party advertised 
that any one calling at his place of business, whether he bought 
anything or not, would receive a numbered coupon entitling 
him to a chance for a prize he was offering. Others adver- 
tised that they had placed in their windows jars full of beans,' 
peas, corn, shot, etc., and the one who would guess nearest to 
the number of beans, peas, shot or grains of corn in a jar would 
receive a prize. And, again, a party distributed numbered 
calendars to the people, generally, with the statement that 
some of the calendars would be redeemed at certain prices, the 
calendars redeemed to be designated by number. The De- 
partment held that there existed a valuable consideration for 
the chance of a prize in each of these schemes. In 1894, a 
lengthy opinion was given by the Author, the then Assistant 
Attorney-General for the Postoffice Department, on a scheme 
of this class presented by Edward P. Sweet, holding that there 



Lotteries, Frauds and Obscenity in the Mails. 23 

existed a valuable consideration for the chances for prizes in 
his scheme, and excluding literature concerning it from the 
mails, whereupon Sweet instituted suit in the Circuit Court of 
the United States for the Northern District of Illinois, to com- 
pel, by mandatory injunction, the postmaster at Chicago to 
receive and transmit through the mails the advertisements of 
his plan of business. The Author prepared and submitted to 
the court an argument, on behalf of the postmaster, embody- 
ing substantially the positions he had assumed in his opinion. 
That argument is as follows: 

The scheme set out in the petition is a lottery or similar 
enterprise offering prizes dependent on lot or chance, and the 
newspapers and calendars concerning it are nonmailable under 
the provisions of the lottery act of September 19, 1890. It 
is conceded that the prizes offered are dependent on lot or 
chance, but the complainant's contention is that the scheme is 
not a lottery, because there is no consideration paid for the 
chance of drawing a prize, and he relies on the cases of Yellow- 
stone Kit v. The State of Alabama (7 L. K. A. 599) and Cross 
et al v. The People (32 Pac. Kep. 821), and the cases there 
cited, to support that contention. 

In Yellowstone Kit vs. The State of Alabama, it appeared 
that eight prizes were to be distributed by lot among some 
8,000 ticket holders. The tickets were distributed to the 
people without exacting anything whatever from them. How- 
ever, on the day of the drawing the parties, issuing the ticket, 
held one of their customary performances, consisting of acro- 
batic contortions, etc., and between acts they sold medicines. 
These exhibitions were in a tent, which would seat between 
900 and 1,000 people, and would afford standing room for 
about 2,500. Por admission to the exhibitions a charge of 10 
cents was made. But these tickets had no connection what- 
ever with those entitling the holders to a chance for the 
eight prizes. These tickets had been distributed free to 
any and all persons present at his previous performances and 
for admission to these exhibitions no charge was made. The 
only fee charged was for the occupancy of a seat; there was 



24 Lotteries, Frauds and Ohscenity in the Mails. 

none for entrance. Nor was it necessary that the holder of a 
successful ticket should be present to get his prize in case he 
drew one. It would be delivered as well at the private resi- 
dence of the winner by the party giving the exhibitions. In the 
application of the general principle announced by the court it 
was held that there was no valid consideration given for these 
tickets, and hence the scheme was not a lottery. 

The judge delivering the opinion said: "The suspicion, 
even though well founded, that these presents may have been 
given away in order to induce a larger crowd to assemble at the 
defendant's performances with the expectation that they would 
buy medicines or pay a fee for occupying a seat in the tent 
would be too remote to constitute a legal consideration." 

In the case of Cross & Co. v. People (supra), it appeared 
that Cross & Co. gave away pianos to advertise their shoe store 
in Denver, Colorado. Every customer and any other person 
registering at the store, or sending a postage stamp with a re- 
quest for one, received a numbered card, which entitled the 
holder to a chance in a drawing for a piano. The Supreme 
Court of Colorado held that there was no consideration paid 
for the card, and hence the scheme was not a lottery. The 
court adds: "The fact that such a chance or card given away 
to induce persons to visit their store with the expectation that 
they might purchase goods, and thereby increase their trade, is 
a benefit too remote to constitute a consideration for chance." 

I do not concur in the conclusion reached in these cases, 
nor do I think the cases cited by those courts support them. It 
seems to me there was in both a valuable consideration for the 
cards or tickets entitling the holders to chances in the draw- 
ings. 

"What is a valuable consideration ? Mr. Chitty, in his work 
on contracts (11 Ed.), page 28, says: "The general rule as to 
the sufficiency of a consideration seems to be that it may arise 
either, first, by reason of a benefit resulting to the party 
promising or to a third person by the act of the promisee; or, 
secondly, by reason of the latter sustaining any loss or incon- 
venience or subjecting himself to any charge or obligation 



Lotteries, Frauds and Obscenity in the Mails. 25 

however small the benefit, charge, or inconvenience may be. 

"It is indeed necessary that the consideration should be 
of some slight value only, or even if it be such as could be val- 
uable to the party promising. 

"So as regards the extent of trouble or loss, or obligation 
which the 'promisee has taken upon himself, it is immaterial 
that the detriment or charge, thus assumed, is, in fact, of the 
most trifling description provided it be not utterly worthless 
in fact and in law." 

In view of this definition, there was, in my opinion, a val- 
uable consideration, for the tickets entitling the holder to a 
chance in a drawing of prizes, in the Yellowstone Kit case, 
both because the acrobat desired and intended to derive some 
benefit from the distribution of tickets among the people and 
because the holders of the tickets were put to some inconven- 
ience, and performed some service at the request of the former. 
He induced the people to advertise his performances and his 
medicines, by which he derived a benefit, and they suffered in- 
convenience and performed some labor. 

In the Colorado case the consideration is more apparent. 
Cross & Co. not only advertised their shoe store by the scheme 
adopted, but no one received a card entitling him to a chance 
in the piano drawing without it having cost him either money 
or labor. Every person buying a pair of shoes received a 
card. In that case there is no question that there was a con- 
sideration for it according to the universal authorities hereafter 
cited. Then again, every person who went to the store and 
registered Jiis name received a card. This required labor. 
This might in some instances be very slight, but that makes 
no difference according to Mr. Chitty. He was put also to 
some inconvenience, and that constitutes a consideration. And 
again, every person who requested a card, sending postage, 
received one. Here we find not only labor performed (writ- 
ing a request for a card), but also the payment of postage on 
his letter, and on the letter inclosing the card. 

In the case now before the court the calendar offered for 
mailing on one page has this in print: 



26 Lotteries, Frauds and Obscenity in the Mails. 

"Calendar No. 34349. Preserve this calendar. Watch 
the Daily and Sunday Times for your number. Kead the 
Minneapolis Times. It is the leading morning newspaper of 
the Northwest. Read directions on my back and learn how to 
get it. $5 to $50 cash every day. The Times is delivered 
in any part of the city for the very small sum of ten cents per 
week, seven days. Single copies by newsboys, daily, two 
cents, Sunday, five cents. If you have got enough give this 
to your little girl, office boy, neighbor, hired man, clerk, or 
cook. All calendar holders have an even chance. See direc- 
tions on back." 

And on the reverse page are found the directions how to 
obtain these prizes in this language: 

"$5 to $50 given away every day in cash presents by the 
Minneapolis Times. Directions: Preserve this calendar and 
watch the Times for your number. If on any day the number 
published in the Times of that morning agrees with the num- 
ber in the upper left-hand corner of the face of this calendar 
you are entitled to the amount named therein. 

"Providing, to secure it, you must bring or send this cal- 
endar to the Times office before 8 p. m. of the same day said 
lucky number is published. Presents offered on Sundays will 
be given the Monday following up to 12 o'clock noon. Call at 
counting room, or on the circulator, in room 211, second floor." 

According to Mr. Chitty's definition, the accuracy of 
which is not disputed anywhere, I believe a valuable consider- 
ation appears in the case before the court, in two ways. The 
holder of a calendar sustains some inconvenience, either pays 
money to or performs labor for the operator of the scheme. In 
order to obtain a prize the holder of a calendar must preserve it 
and take or send it to the Times office. This is specifically 
stated in the terms of the offer of the prizes, and whether so 
stated or not it is evident no one could draw a prize unless he 
preserve and present the lucky calendar at the proper time and 
place. This requires some labor and inconvenience, and Mr. 
Chitty says: "It is immaterial that the detriment or charge 
thus assumed is, in fact, of the most trifling description, pro- 



Lotteries, Frauds and Obscenity in the Mails. 27 

vided it be not utterly worthless in fact and in law." And 
especially inadequacy of consideration can not be considered 
in determining what is or what is not a lottery, because 
the main element and the most objectionable element of a lot- 
tery, as of all other gambling schemes, is the want of consider- 
ation; that is, the winner gets something for nothing or for 
almost nothing, and the less inconvenience he is put to, or the 
less labor he has to perform, or the less money he pays to 
entitle him to a chance in a drawing of prizes out of propor- 
tion to such inconvenience or labor or payment, so much more 
apparent the gambling feature becomes. The promoter of the 
scheme of the character set out in this petition ought not, 
therefore, be permitted to say the inconvenience or labor of the 
holder of the calendar is small, when that inconvenience was 
sustained, and that labor performed at his special request and 
strictly in conformity to the terms prescribed by himself. 

Does the proprietor of the Minneapolis Times intend the 
prizes he distributes daily as presents or gifts to the holders 
of the numbers ? I do not think it will be seriously claimed 
that he does. Unquestionably he expects a return in some 
way, and the way is apparent. He advertises his paper. He 
induces all calendar holders to advertise, though very few 
of them receive prizes. He directs the calendar holder 
to preserve the calendar to " watch the Daily and Sunday 
Times for his number," and to read the directions how to get 
the prizes. The recipient of a calendar examines the direc- 
tions and finds that in order to get a prize he must, if he holds 
a lucky number, "take or send the calendar to the Times office 
before 8 p. m. of the same day said lucky number is pub- 
lished," or if published on Sunday by 12 o'clock next day. 
How can he do all this without buying the Times or going to 
someone who does buy it ? How is he to knoAV that he holds a 
lucky number except by watching the papers daily ? His 
friends can not notify him because his name is not published; 
all. that is given are the numbers drawing prizes. The first 
thing a party receiving a calendar would think of doing, if he 
had any desire to draw a prize, would be to- subscribe for "the 



28 Lotteries, Frauds and Obscenity in the Mails. 

leading morning newspaper of the Northwest, delivered in any 
part of the city for the very small sum of 10 cents per week — 
7 days." He dare not rely on stray copies that might occa- 
sionally fall into his hands, but he would have to implicitly 
obey the injunction to "watch the Daily and Sunday Times" 
for his number, and to do this effectually he would have to 
subscribe. If he does not subscribe he would have to go daily 
to someone who does, in order to watch the Daily Times. If 
he subscribes he would pay his money out, which, it is con- 
ceded, would constitute a consideration for a chance in the 
drawing, even if the paper was worth "10 cents a week — 7 
days," and if he does not subscribe he would have to go daily to 
someone who does, in order to watch the Daily and Sunday 
Times, in which case he would perform a great deal of labor, 
besides finally sending or taking the lucky calendar to the 
Times office. 

I can not do better than quote from the calendar of an- 
other promoter of a similar scheme, to show that there is a 
consideration. He says: "To the question 'How can we 
offer to give away $10,000 V we answer, 'By this system we 
save in the value of advertising space much more than the 
prices of the presents we offer ($10,000), and divide by lot the 
amount so saved to the people as better inducement to pre- 
serve the advertisement herein contained.' * * * We 
shall be satisfied with our rewards if our liberal distribution 
of money causes this little book to be read and preserved." In 
that case the sender of the calendar was a vender of medicines, 
and he conclusively shows, as it must be apparent from com- 
plainants' proposition, that the recipient of a calendar does per- 
form a valuable service for the party who distributes the cal- 
endars. Indeed, so manifest is the consideration that it would 
support a contract. If complainant should offer to pay money 
for each calendar taken or sent to the Times office the courts 
would compel him to perform the contract, on the ground, as 
heretofore stated, that the party preserving the calendar and 
taking or sending it to the office performed some service and 
was put to some inconvenience at the request of complainant. 



Lotteries, Frauds and Obscenity in the Mails. 29 

I do not presume it will be contended that the consideration, 
for a prize ticket or card or number should be in money or prop- 
erty, but can not be in valuable services. Suppose complainant 
should offer to distribute by lot prizes from $5 to $50 daily to 
newspapers throughout the country which would insert an 
advertisement of the Minneapolis Times, or should offer to dis- 
tribute prizes by lot to those who would deliver his paper to his 
patrons, or to those who would offer to set type for him three 
months, would anyone contend that he was not proposing to 
operate a lottery? If, then, valuable service rendered for a 
chance in a drawing be a sufficient consideration in any 
case to constitute the drawing a lottery, where are you going 
to draw the line? It must be at that point, and that point 
alone, where the service begins to be valuable, or where the 
recipient of a number entitling him to a chance in the draw- 
ing suffers some inconvenience, however slight, or performs 
some service, however trifling, at the request and for the ben- 
efit of the promoters of the scheme. And in this connection 
it should be noted that, according to Mr. Chitty's definition, 
it is not necessary that a benefit should, in fact, accrue to the 
promisor; it is enough "if it be such as could be valuable to 
the party promising." That the service of the calendar holders 
could be valuable service to the proprietor of the Times is 
manifest, from the fact that he offers to pay them from $5 to 
$50 daily. ~No man of the commonest business capacity 
would make such an offer, and especially would no one so 
strenuously insist on his right to do so, as to resort to the courts 
to enforce it, unless he expected to be benefited and unless 
experience shows that promoters of such schemes invariably 
reap a rich reward in money. 

Now let us examine the cases that support, more or less 
strongly, the position I have taken. These are: State v. 
Willis, 78 Me, 70; Dunn v. People, 40 111. 465; United States 
v. Olney, 1 Deady, 461; State v. Mumford, 73 Mo. 647; 
Thomas v. People, 59 111. 160; State v. Shorts, 32 K J. L. 
465; Wooden v. Shotwell, 23 1ST. J. L. 398; Seidenbender v. 
Charles, 4 Serg. and Kowle, 151; Negley v. Devlin, 12 Abb. 



30 Lotteries, Frauds and Obscenity in the Mails. 

Pr., K S. 210; Ex parte Blanchard, 9 }\ T ev. 101; Eandal v. 
State, 42 Tex. 580; Holnian v. State, 2 Tex. App. 610; Eu- 
banks v. State, 3 Heisk. 488; Hull v. Buggies, 56 
K Y. 424; State v. Moren (Minn.), 51 K W. Eep. 
618; State v. Kansas Mercantile Association (Kan.), 25 Pac. 
Eep. 984; Taylor v. Smetton, 11 Q. B. D. 207; Hndelson v. 
State, 94 Ind. 426; Horner v. United States, 147 H. S. 449. 

In many of these cases newpapers offered prizes to sub- 
scribers and in others parties sold articles, accompanied in all 
cases by coupons or tickets entitling the holders to chances in 
drawings and the schemes were, uniformly, held to be lotteries, 
though the newspapers in one class of cases and the articles 
in the others were worth all that was paid for them. 

In the last case cited above it appeared that the Austrian 
Government sold bonds for their face value, and with each 
bond a ticket entitling the holder to a chance in a drawing for 
the distribution of large sums of money in addition to the 
amount called for in the bond with the interest. The Supreme 
Court of the United States, after quoting with approval from 
the opinion of the Court of Appeals of Maryland, in Ballock 
v. State (73 Maryland, 1), said: "The court further remarked 
that it has been vigorously argued that because the money ven- 
tured must all come bach, with interest, so that there could be 
no final loss, it could not be a lottery, and added: 'At some 
uncertain period, determined by the revolution of the wheel of 
f ortune,the purchaser of a bond does get his money repaid, but' 
we do not think this deprives the thing of its evil tendency, or 
robs it of its lottery semblance and features. The inducement for 
investing in such bonds is offered of getting some bonus, large 
or small, in the future, soon or late, according to the wheel's 
disclosures. The investment may run one year, or it may run 
thirty years, according to the decision of the wheel. It can 
not be said this is not gambling, and that it does not tend in 
any degree to promote a gambling spirit and of making gain 
through the chance of dice, cards, wheel or other method of 
settling a contingency. It certainly can not be said that it is 
not in the mature of a lottery,' and that it has no tendency to 



Lotteries, Frauds and Obscenity in the Mails. 31 

create a desire for other and more pernicious modes of gam- 
bling.' " In the Horner case, and many of the cases cited 
above, the purchaser of tickets received full value for the 
amount paid, aside from the chances in the drawings. Hence 
in a legal sense it might very well be said there was no con- 
sideration for the tickets. But it was uniformly held that there 
was a consideration in that an in inducement to purchase the 
articles sold was held out to the public in the giving of the 
tickets. Now, in the case under consideration, and the Ala- 
bama and Colorado cases, above cited, tickets in lotteries were 
given away in order to induce people to advertise the several 
schemes and invest their money in them. It is a direct appeal 
to the gambling spirit of the people, and in the language of the 
Court of Appeals of Maryland, in the Ballock Case, supra, 
"Our statute does not justify a court, expressly directed to so 
construe the law as to prevent every possible evasion, whether 
designedly or accidentally adopted, in deciding a thing is not 
a lottery simply because there can be no loss when there may 
be very large contingent gain, or because it lacks some element 
of a lottery according to some particular dictionary's definition 
of one, when it has all the other elements, with all the per- 
nicious tendencies, which the State is seeking to prevent." 

I have not had the pleasure of examining any brief or 
argument of counsel for complainant since the institution of 
this proceeding, but while the matter was pending before the 
Postoffice Department for a ruling I received an argument pre- 
pared, presumably, though not signed, by Mr. Sweet's attor- 
ney. I wish to notice some of the positions assumed in the 
case presented to the court. I quote as follows: 

"Why, then, is it not enough to make a lottery of any 
scheme where all the other essential elements are presented? 
Because the legislation against lotteries is solely to prevent per- 
sons from being wronged, and not to prevent any one from 
being benefited. This is the only ground for suppressing them. 
Because they do evil, not because they do good; because they 
impoverish, not because they enrich. In construing our de- 
finition of lottery, therefore, we must so construe it that the 



32 Lotteries, Frauds and Obscenity in the Mails. 

word 'consideration' applies only to value parted with, or 
sacrifice made by, the receiver of the chance, and never to any 
benefit or pleasure derived by the managers of the scheme. " 
This reasoning is not sound, nor is the position taken cor- 
rect in law or in fact. Who was wronged in the Horner Case ? 
Did not every investor get back his money with interest, and 
was there in a single instance final loss to any one? No. 
Those who drew prizes were simply benefited above their fel- 
lows. But somebody was wronged in the Horner Case, and 
so is somebody to be wronged in the case before the court. 
The Supreme Court of the United States assumed that some 
bought Austrian bonds because prizes were offered, who would 
not otherwise have invested, and in such case such party was 
wronged, not because he would lose anything by the transac- 
tion, but because he was by improper means induced to buy 
something that he would not have bought in the absence of 
such means. But in that case the prizes were not to be paid 
out of money paid into the Austrian treasury by investors in 
bonds, but were to be paid out of revenues raised by taxation. 
If that scheme was a lottery and pernicious to society, how 
much more so is the one before the court ? Here the prizes, 
from $5 to $50, every day, are to be paid out of the money to 
be furnished by the proprietor of the Minneapolis Times or 
by the people, who are induced to subscribe for the Times by 
the offer of prizes, i. e., by the additional subsc7*ibers obtained 
by this offer alone. It would take a wonderful stretch of the ■ 
imaginative faculty to suppose that the proprietor of the Times 
expects to furnish the money, and hence it must be derived 
from those who subscribe solely to get the prizes. If the min- 
imum amount in prizes ($5) is distributed daily it would re- 
quire 250 daily subscribers for the paper at 2 cents each, the 
price at which the Times is advertised to be delivered by news- 
boys, or if the maximum amount in prizes ($50) should be 
distributed daily, it would require 2,500 daily subscribers to 
raise the amount, leaving out of view the cost of printing, 
material, and delivery. Now mark, it requires those sub- 
scribers in addition to those who take the paper in the regular 



Lotteries, Frauds and Obscenity in the Mails. 33 

way for its news and advertising iteins, and these the proprietor 
expects to get because of the hope aroused in the human breast 
of winning a prize, and by that alone, for he could not afford 
to pay, nor would pay, such prizes daily out of the revenues 
received by him from the ordinary subscription list, which 
would come to him anyhow. And again it must be noted 
that the proprietor expects to make more than enough to simply 
pay the prizes. He expects to make a profit. If he did not 
expect all this, this court would not be called upon to decide 
that he had a lawful right to adopt such a scheme, nor would 
it be of enough importance for me to spend any time discussing 
it, because it would be harmless. Taking $25 as the average 
amount to be distributed daily, it would take 1,250 of these 
additional subscribers to raise the money, and out of this num- 
ber ten at $2.50 each would get the prizes, leaving 1,240 who 
invested money hoping to get a prize with nothing, and to 
these must be added hundreds of other subscribers who went 
into the enterprise for the sole purpose of competing for a 
prize, to make any profit for the proprietor. Will those 
1,240 and these additional hundreds be wronged ? Certainly 
they will be, if those who bought Austrian bonds and who drew 
no prizes were wronged. It is no answer to say that the party 
subscribing for the paper gets full value, and no final loss can 
come to him, for that was the outcome in the Austrian bond 
case. 

Complainant's attorney in the argument, on file in this 
office, urges that Mr. Chitty, in his definition of a considera- 
tion, and I overlooked the distinction between motives or in- 
ducements and considerations. It is true, I say, that the offer 
of prizes operates as an inducement to subscribe for the paper, 
but that is the word the Supreme Court of the United States 
used in the Horner Case. The court in that case assumed, 
and this court may very properly assume in this case, that the 
inducement is so strong that it brings forth fruit and 
that parties are induced by the offer of prizes to invest their 



34 Lotteries, Frauds and Obscenity in the Mails. 

money or put themselves to inconvenience or perform some 
service when they would not otherwise do so. 

In conclusion, I will add that in my judgment the schemes 
set out in the Alabama and Colorado cases above cited and 
the scheme now before the court appeal for their success to the 
gambling spirit of the people, and to that alone. They inspire 
the hope of realizing a sum of money out of all proportion to 
the amount they invest or to the inconvenience they suffer or 
labor they perform. They arouse the spirit of getting some- 
thing for nothing. They are more pernicious than an avowed 
lottery. In the language of the Maryland court of appeals, 
quoted with approval by the Supreme Court of the United 
States in the Horner Case, "it can not be said this is not a 
species of gambling — and that it does not tend in a degree to 
promote a gambling spirit and a love of making gain through 
the chance of dice, cards, wheel, or other method of settling a 
contingency. It certainly can not be said that it is not in the 
"nature of a lottery/ and that it has no tendency to create a 
desire for other and more pernicious modes of gaming." What 
a furore is created among the people by the distribution of 
prizes by the acrobat at the last of his performances or by the 
giving of a piano by a shoe dealer to the party holding a lucky 
card, or the daily distribution of from $5 to $50 to the persons 
holding the winning numbers of calendars. What a rush will 
be made daily by calendar holders to get copies of the Minne- 
apolis Times, so that they may watch for their numbers. The 
promoter of the scheme knows what effect his offer will have 
on the people, and he knows that thousands will buy his paper, 
not for the news it contains,, but to see if their numbers have 
drawn prizes. In this way he confidently expects, and if the 
experience of the past is to be accepted as an index to the 
future, his expectations will be realized, that the additional 
subscribers to his paper induced by this method will not only 
pay the prizes but leave him a handsome margin of profits 
besides. 

My opinion is, the scheme is a lottery, appealing to the 
gambling spirit of the people for its success, and directly 



Lotteries, Frauds and Obscenity in the Mails. 35 

tending to create a desire for more pernicious modes of gaming, 
and the calendar and the newspapers advertising it ought to be 
held nonmailable under the act of September 19, 1890. 

The court, Judge Grosscup, presiding, dismissed the 
petition on the ground that the scheme was a lottery, but no 
opinion was filed, and there the matter ended, no appeal having 
been taken. 

Sec. 16. The general rule relative to the consideration 
in schemes of this class, deducible from the adjudged cases 
and the elementary principles, may be formulated as follows: 
Where a promoter of a business enterprise, with the evident 
design of advertising his business and thereby increasing his 
profits, distributes prizes to some of those who call upon him 
or his agent, or write to him or his agent, or put themselves 
to trouble or inconvenience, even of a slight degree, or per- 
form some service at the request of and for the promoter, the 
parties receiving the prize to be determined by lot or chance, 
a sufncent consideration exists to constitute the enterprise a 
lottery though the promoter does not require the payment of 
anything to him directly by those who hold chances to draw 
prizes. 

• • THE PRIZE ELEMENT. 

Sec. 17. There has been considerable discussion as to the 
meaning of the word "prize" as used in the definition of a 
lottery. In the most of these schemes the prize element is 
present beyond cavil or doubt, but here, as elsewhere, there 
are to be found cases lying along the borderland of doubt. 
It may be stated, as a general rule, that a prize in a lottery is a 
pure donation by the promoter to the winner. In other words, 
the winner must receive more than he invests and the differ- 
ence between what he invests and what he receives must not 
have been earned by him or earned by money, property or 
service contributed by him before he can be regarded as hav- 
ing obtained a prize. It is not important that this difference 
between what is invested and what is received should be large, 
one of the essential elements being that it should be awarded 



36 Lotteries, Frauds and Obscenity in the Mails. 

as a bonus or pure gift, i. e., that the winner gets something 
for nothing. It is also essential that some adventurers should 
receive more than others similarly situated in proportion to 
their investments. If the promoter of a scheme should ad- 
vertise that he would receive small sums of money from in- 
vestors in monthly instalments and would distribute the whole 
monthly income, after deducting his commissions, to some 
of his patrons by lot or chance, giving to the lucky ones the 
money they had invested with a certain rate of interest per 
annum thereon, the interest thus paid could be regarded as 
nothing but a prize because the money could not, according 
to the conditions of the scheme, earn anything, and would 
manifestly have to be lost by the unlucky ones. Take another 
illustration. A party advertises that he will receive small 
sums of money, monthly, from the people, for a term of years, 
twenty-five per cent of which he would invest at interest, ten 
per cent he would retain as an expense fund, and the balance 
of the income he would distribute monthly to some of his 
patrons by lot or chance, giving the winners the money they 
contributed with greater profits, than twenty-five per cent of 
what they contributed could, in the ordinary course of business 
earn; this excess of profits would be a prize because it could 
not be earned, and, in such a scheme, conducted in that way, 
some must lose in order that others may win and that is, at 
last, the supreme test in all gambling transactions. An an- 
alysis of such a scheme will show plainly its gambling ele- 
ments, including a prize. Suppose ten men invest in the 
scheme, paying three dollars monthly. The income for a 
month would be $30. The promoter takes out $3 for his 
commission, leaving $27; twenty-five per cent ($7.50) is set 
apart to be invested at interest and there is left for distribution 
$19.50. Suppose the twenty-five per cent is loaned at the 
beginning of the month, at ten per cent interest per annum. 
The interest at the end of the month would amount to six and 
one-quarter cents. The promoter selects by lot six of the ten 
investors to whom he pays the full amount of their investment 
with ten per cent interest per annum thereon. That would 



Lotteries, Frauds and Obscenity in the Mails. 37 

give each lucky investor $3.02 1-2, or to all the six $18.15. 
There would be left $1.35 in the fund for distribution and 
$7.56 1-4 in the reserve fund, making a total in the treasury 
of $8.91 1-4. Treating the four unlucky investors as, in 
equity, entitled the same amount each of the lucky investors 
received, it would require $12.10 to pay them. Deduct from 
this the $8.91 1-4 in the treasury and there is left a deficit of 
$3.18 3-4 at the end of the first month. And the deficit will 
grow larger and larger in proportion to the number of unpaid 
investors the longer this plan on these conditions continues; 
and hence, it is evident that there must, of necessity, be a 
final loss to some by distributing to others profits which their 
money has not earned and according to the conditions of the 
scheme can not earn. This illustration is given to illucidate 
the foregoing principle but none of the many schemes of this 
character operated in the United States in the last few years is 
conducted upon so conservative a basis. In all, or nearly all, 
the promoters deduct, first, an initiation fee from each investor 
and then appropriate more than ten per cent of the monthly 
income for expenses, so that the deficit at the end of each 
month is much greater in the actual schemes than in the 
hypothetical case above given and the proportion of the losers 
must be larger. 

Sec. 18. The Postofiice Department, in 1894 and 1895, 
permitted companies to operate schemes upon the plan abovej 
outlined on the ground that the prize element in them wasl 
lacking, but, after much discussion and after the opinion of 
the Attorney-General of the United States in the Bond Invest- 
ment cases to be hereafter noticed, the Department reversed its 
policy and refused to permit the mails to be used to advertise a 
business conducted upon such conditions. 

Sec. 19. There is another class of cases lying along the 
border land of doubt. In these cases the promoters offer to 
give to all contestants articles which they claim are of equal 
value, though of different kinds, the article each is to receive 
to be determined by the promoters at their discretion. The 



38 Lotteries, Frauds and Obscenity in the Mails. 

Postoffice Department held that the prize element was present 
in these schemes for the reason that a contestant may draw 
something he personally has no nse for or is unable, from a fi- 
nancial point of view, to keep and hence, to realize anything on 
it he must go into the market to sell it and as a rule he can not 
get one-tenth of the value placed upon it by the promoter. 
Take an illustration. A promoter of a business enterprise 
offers to distribute among his customers, at his discretion, 
plows, ladies' watches and gentlemen's watches, each of which 
he values at ten dollars. A farmer enters the contest, hoping 
to draw a plow, the lady enters hoping to get a lady's watch 
and a clerk with the expectation of getting a gentleman's 
watch. But the outcome is disappointing to all but the lucky 
one. The farmer draws a lady's watch, the lady a plow, and 
the clerk a gentleman's watch. The farmer and the lady are 
forced into the market with the articles and fail to realize any- 
thing like ten dollars each, and hence they may very properly 
be regarded as losers, while the clerk drew what he wanted 
and may very properly be regarded as a winner. When' these 
schemes were presented to the Department it became manifest 
to the postal officials that there could be no motive in giving 
different articles unless there was a difference in value, no 
matter what the promoters claimed, and hence, to eliminate 
the prize element, the promoters were required to give the 
same thing to each contestant or give the contestants their 
choice of the articles claimed to be of the same value. In 
other words, the Department gave the discretion of selecting 
the articles to the customers instead of the promoters. Reluc- 
tance on the part of the promoters to yield this discretion to 
their customers was regarded by the Department as conclu- 
sive evidence^that they desired to retain an advantage to the 
detriment of those who dealt with them. In this connection it 
must not be forgotten that the most of the gifts in the schemes 
of this character were offered by irresponsible parties and were 
made up chiefly of pinchbeck jewelry and cheap watches, 
clocks, etc., and an exorbitant value, out of all proportion to 
their true value, was placed upon them. Those who patron- 



Lotteries, Frauds and Obscenity in the Mails. 39 

ize such enterprizes do not know or forget that their promot- 
ers intend to and do recoup the cost of the gifts in some way. 

This identical question has not been before the courts but 
the case of IT. S. vs. Beatty, 60 Fed. Eep. 740, though a case 
involving a fraudulent transaction, throws some light on the 
principle above announced. 

In that case the court held, in construing section 5480, 
R. S. U. S., that the defendant might be guilty of perpetrating 
a fraud if he did not send such an organ as he represented he 
would send "even if one as good or better was intended to be 
sent. The particular kind might be material to the purchaser 
and his money might be obtained by false pretenses as to that 
although not profitable to the seller." 

Sec. 20. But the definition of prize, thus far stated, 
includes much more than a lottery prize includes. A prize, 
in its general sense, as has been shown, includes everything 
donated to a party for which the party receiving it has not 
given a quid pro quo or at least not a sufficient quid pro quo 
and in this sense it would include money or property staked 
or promised upon ordinary wagers as well as that offered in 
lottery schemes and it would also include money or property 
offered in legitimate contests of skill, speed, strength, endur- 
ance, knowledge, etc. It is important, at this point, therefore, 
to ascertain, as far as practicable, the limitations of that word, 
in its relation to lottery schemes. Here, as well as elsewhere, 
it is difficult, if not impossible, to accurately distinguish a lot- 
tery prize from ordinary bets and wagers or to distinguish it 
from that which is given as a reward for excelling in contests 
of skill, speed, strength, endurance, knowledge, etc., in which 
the gambling element is not present. This subject, in a gen- 
eral way, has received some consideration by the English 
courts in cases involving the construction of the Statute of 8 
and 9 Vic. C. 109, S. 18, which declared all wagering or gam- 
ing contracts void, with the proviso that the enactment should 
not apply to any subscription or contribution for or toward any 
prize to be awarded to the winner of. any lawful game, sport, 
pastime or exercise. At first the courts there held that money 



40 Lotteries, Frauds and Obscenity in the Mails. 

or property actually staked or bet on a race or game, though 
by way of wager, by two or more parties, to be awarded to the 
winner, was simply a prize under this proviso and that it made 
no difference whether there were two or fifty subscribers to the 
fund; but that money or property not deposited, but which 
was simply promised to be paid or delivered, did not come 
within the proviso. Batty vs. Mariott, 5 C. B. 818; Parsons 
vs. Alexander, 1 Jur. (N. S.) 660; Johnson vs. Lansley, 12 
C. B. 468; Brown vs. Overbury, 11 Exch. 715; Irwin vs. Os- 
borne, 5 Ir. Kep. 604; Crofton vs. Colgan, 10 Exch. Bep. 133, 
and Coombs vs. Dibble, L. K. 1 Exch. 248. The judges, in 
some of these cases, did not give their full assent to the doc- 
trine and afterwards it was rejected, in toto, by the Court of 
Appeals in Diggle vs. Higgs, 2 Exch. Div. 422, and later by 
the Judicial Committee of the Privy Council in Trimble vs. 
Hill, 5 App. Cas. 342. 

In the Diggle-Higgs case the court held that this proviso 
applied only to prizes in agreements which were not in the 
nature of wagers and that it made no difference whether 
money or property was actually deposited or only promised to 
be paid or delivered and this ruling was followed in Trimble 
vs. Hill. These cases, while they do not leave the matter very 
clearly settled, afford a number of illustrations of transactions 
which are not subscriptions to a prize and it may be stated that 
they settle these propositions : 

1. The prize mentioned in the proviso. must be offered 
in a transaction which is not at all in the nature of a wager. 
2. The mere deposit of stakes by two or more parties to be 
awarded to the winner in any race or game is a wager and noth- 
ing more. 3. The winnings, contributed by the competitors 
themselves, are not prizes, while money or property, contrib- 
uted by a stranger, who could not win, but who was sure to 
lose that which he contributed, was a prize within the proviso. 
In Applegarth vs. Colley, 10 M. and W. 723, the distinction 
was made between winnings deposited by the competitors and 
a sum added and that the deposits might be in the nature of 
money won on a wager while the "sum added" by some out- 



Lotteries, Frauds and Ohscenity in the Mails. 41 

side person was a legitimate prize, which the winner could 
recover. 

"The difference/ 7 argued Sergeant Byles, in Allport vs. 
ISTutt, 1 C. B. 974, "between a lottery and a sweepstakes is 
this: In a lottery, the party getting it up receives from the 
purchasers of the tickets more than the value of the prizes; 
whereas, in a sweepstakes all the money obtained from the 
subscribers is paid over to the winners; the party, to whom the 
subscriptions are paid, is a mere stake holder." 

Sec. 21. In Harris vs. "White, 81 K Y. 532, the court 
held that a prize, offered by an authorized association, for the 
fastest horse in a race, was not a bet or stake within the New 
York Statutes. 

In the case of a bet, as defined by Chief Justice Folger, 
"each party gets a chance of gain from others and takes a risk 
of loss of his own to them. But a purse, prize or premium 
is, ordinarily, some valuable thing, offered by a person, for the 
doing of some thing by others, into the strife for which he does 
not enter. He has not a chance of gaining the thing offered 
but must certainly lose it." In that case it was urged that 
the payment of entrance fees by the competitors in the races 
was the staking of so much of their own money upon the re- 
sult but the court decided otherwise on the ground that the 
identical money contributed by the competitors themselves 
was not paid "as- in Gribbons vs. Gouvenor, 1 Denio, 170, for 
the express purpose of making a stake to be specifically 
trotted for, and for no other purpose, and with the previous 
agreement that the very sums thus paid should form the stake, 
and go, the whole of it, to the winner of the race." This case 
was cited as controlling authority in People ex rel. Lawrence 
vs. Fallon, 152 N. Y. 12, which case also involved the ques- 
tion as to what was a prize as contradistinguished from a bet 
or ordinary wager. In Alvord vs. Smith, 63 Ind. 58, the 
court, in distinguishing a bet or wager from a premium, said : 
"In a wager or bet there must be two parties, and it is known 
before the chance or uncertain event, upon which it is laid, 
is accomplished who are the parties, who must lose or win. 



42 Lotteries, Frauds and Obscenity in the Mails. 

In a premium or award there is but one party to the act, thing 
or purpose for which it is offered has been accomplished. A 
premium is a reward or recompense for some act to be done. 
A wager is a stake upon an uncertain even." 

To the same effect are Delier vs. Ply. Co. Ag. Soe., 51 
Iowa, 481; Missner vs. Knapp, 13 Oregon, 135 (57 Am. Rep. 
6); Hankins vs. Ottinger, 115 Cal. Eep. 454, 40 Law. Rep. 
Ann. 76; Ballard vs. Brown, 67 Ver. 586. 

These cases do not make a clear and well-defined distinc- 
tion between a prize or premium and an ordinary bet or wager. 
Judge Folger says a prize is, ordinarily, a valuable thing, 
offered by a person into the strife for which he does not enter 
and it is evident he used the word "ordinarily" advisedly, be- 
cause there can be and, no doubt, there are contests for prizes, 
into the strife for which the parties, offering them, do enter. 
The party, offering a prize for the fastest horse, may enter 
his own horse in the race and so may the promoter of a lottery 
scheme retain for himself tickets, either because he desires to 
retain chances for the prize offered, or because he can not sell 
all the tickets. 

And that the court, in Alvord vs. Smith, and the other 
cases above cited, had in mind a lawful prize, not in the nature 
of a wager, clearly appears from the statements that a wager 
is "a stake upon an uncertain event," and "a premium is a 
reward or recompense for some act to be done." 

Sec. 22. If we appeal to the lexicographers, we can not 
reach a more definite conclusion in regard to the meaning of 
this word in its relation to lottery gambling. Mr. Webster 
defines prize thus: "An honor or reward striven for in a 
competitive contest; anything offered to compete for, or as an 
inducement tQ or reward of effort." Thus far Mr. "Webster 
evidently intended to define a prize in a lawful contest or effort 
which does not contain the element of a wager, for he imme- 
diately proceeds to add that a prize is "that which may be won 
by chance, as in a lottery." 

The Century Dictionary defines prize in relation to law- 
ful competition thus: "That which is obtained or offered as 



Lotteries, Frauds and Obscenity in the Mails. 43 

the reward of exertion or contest, as a prize for Latin verses;", 
and then defines the word in its gambling sense generally as 
"that which is won in a lottery or any similar way." 

Here is where the court and lexicographers leave the defi- 
nition of prize. 

While the limitations of the word prize, in its application 
to lottery gambling, can not be definitely and accurately 
stated, the following propositions may be considered as settled 
by the foregoing authorities and in the light of reason: 1. 
That which is offered as a prize must be in the nature of a 
pure donation. 2. The prize must be offered in a contest or 
scheme that contains the element of a wager. 3. Ordina- 
rily the prize must be offered by a party who can not win but 
must lose it and into the strife for which he does not enter. 

Exceptions to the third proposition may and probably 
will arise but it is not thought advisable, even if it were pos- 
sible, to undertake to state them in advance of the concrete 
cases in which they may be presented for adjudication. The 
true meaning and nature of the second proposition will be ex- 
amined when we come to consider "prizes dependent upon lot 
or chance." 

LOT OR CHANCE. 

Sec. 22a. This is the most important element of a lottery 
and at the same time it is, by far, the most difficult to accu- 
rately define. 

Lot, in its relation to gambling, is evidently a more lim- 
ited term than chance and applies more specifically to those 
schemes wherein some mechanical device, such as a die, ball or 
slip of paper, is used to determine the winner, and denotes an 
entire absence of all means of calculating results. In this 
sense lot is equivalent to pure chance, while chance, without 
qualification or limitation, is a generic term, including lot and 
all other methods devised to determine the event, upon which 
a stake or prize is to be awarded to the winner. Chance, being 
a generic term, in which lot is comprehended, will alone be 



44 Lotteries, Frauds and Obscenity in the Mails. 

made the subject of a critical examination in order to deter- 
mine its meaning and scope in its relation to lottery gambling. 
Sec. 23. The primary definition of chance, as given by 
"Webster, is that, "it is a supposed material or psychical agent 
or mode of activity, other than a force, law or purpose." In 
times past this was unquestionably the popular conception of 
chance. The Romans deified and worshiped chance under 
the name of Fortuna, and the Greeks under the name of 
Tyehe. This goddess, as popularly conceived, worked without 
law and dispensed her prizes indifferently and capriciously. 
In the present age of enlightenment and advancement, how- 
ever, this conception of chance few, upon reflection, would be 
disposed to entertain as corresponding to anything which really 
exists. The religious mind rejects it as inconsistent with a 
belief in Divine Government, and the philosophical mind ex- 
cludes it as inconsistent with due recognition of the universal 
laws of causation. And yet, in a sense, the old superstition 
prevails to this day. Among all classes everywhere in the 
world attempts, even serious attempts, are made to exorcise 
this unseen, unknown agent, or force, or goddess, or whatever 
it may be called, by talismans, charms, mascots, etc., in end- 
less forms and varieties, and the fortune teller, even in this 
age, is able to fleece the people, because of his supposed power 
to pierce the veil that hides the future from us and reveal its 
secrets. But chance, when examined philosophically, it is 
manifest, has no real existence as an agent or force and our 
conception of it, when thus considered, is subjective rather 
than objective. "When reason is allowed full sway and emo- 
tion and mere sentiment are wholly eliminated from considera- 
tion, all recognize that every effect has an adequate cause, 
whether that cause be known or unknown and that every cause 
will produce or has produced its legitimate effect, whether we 
know or do not know that effect. It is not logically correct 
to say that anything happens by chance. In this universe of 
ours there is an infinite number of causes, remote and prox- 
imate, direct and indirect, potent and weak, which contribute 
to bring about results and so many of these causes are hidden 



Lotteries, Frauds and Obscenity in the Mails. 45 

from us, that we find ourselves utterly unable, in the most of . 
cases, to forecast the future, and predict with certainty what 
will or will not occur, or even to tell what has already occurred 
until it is revealed to us. But we know, notwithstanding this 
limitation of our mental faculties, that we do not live in a 
world of chance, and when we speak of chance as being an effi- 
cient cause of an effect we simply mean to signify our ignor- 
ance of the real causes that have operated to produce or the 
conditions that surround that effect. 

Sec. 24. Mr. Webster, after having given the above 
definition of chance, quotes Samuel Clark as follows : 

"It is strictly and philosophically true in nature and rea- 
son, that there is no such thing as chance or accident ; it being 
evident that these words do not signify anything really exist- 
ing, anything that is truly an agent or cause of any event ; but 
they signify merely men's ignorance of the real and immediate 
cause." 

And in Chamber's Encyclopaedia we find this language : 

"Chance, in its original and strict meaning, may be de- 
fined as that which determines the course of events, in the ab- 
sence of law, ordinary causation, or providence. Strictly 
speaking, it is an idea, which few would now be disposed to 
admit as corresponding to anything which really exists; the 
religious mind excluding it as inconsistent with the belief in 
the Divine Government, and the philosophical mind rejecting 
it as inconsistent with a recognition of universal laws of caus- 
ation. As a word, however, it has always been, and always 
will be popularly accepted; and its use is correct so far as we 
overlook, or choose for the moment to throw out of view, the 
more universal connection of events, and regard them as their 
emergence, on a superficial view, appears to be determined." 

Mr. Jefferson in his memorial to the Virginia Legislature, 
heretofore referred to, speaking of chance, said: 

"Nothing happens in this world without a cause. If we 
know the cause we do not call it chance ; but if we do not know 
it, we say it was produced by chance. If we see a loaded die 
turn its lightest side np, we know the cause and that is not the 



46 Lotteries, Frauds and Obscenity in the Mails. 

effect of chance; but whatever side an unloaded die turns up. 
not knowing the cause, we say it is the effect of chance." 

Sec. 25. Thus we find these authors, as, upon examin- 
ation, we will find all scientists and logicians concurring in the 
proposition that in fact, there is no such thing as chance any- 
where in the universe and when we examine our idea of it 
critically, we find that in the use of the term we mean simply 
to signify our ignorance of events and its employment is cor- 
rect so far and only so far as we overlook or choose for the 
moment to throw out of view the more universal connection 
of cause and effect and regard the events as their emergence, 
on a superficial view, appears to be determined,. 

While this conception of chance has been the one adopted 
by an overwhelming majority of the courts and of the officers 
clothed with the power of construing and administering the 
laws against lotteries, a few courts and officers have evidently 
proceeded upon the theory that chance is an existing agent 
and that it inheres in events themselves, rather than in our ig- 
norance of events. This theory is wholly erroneous, as will 
clearly appear by a few illustrations. ■ 

Sec. 26. Before an election a party bets that a certain 
candidate will be elected. When we regard the chances of 
winning such a bet, we have regard, primarily, to the event it- 
self, which is to occur in the future. At the close of the polls 
but before the result is known, a party bets that a certain can- 
didate has been elected. The event itself in that case has been 
determined and if there be any chance of the bettor's failure 
to win, it must relate solely to his ignorance of what the result 
of the election is. A promoter of a scheme offers a prize to 
the party giving the correct word omitted in a given sentence 
and provides that the correct word shall be determined by him- 
self or by a committee to be appointed either by himself or 
by the adventurers. Here the missing word, the event, is to 
be ascertained in the future and, primarily, we conceive 
of the chance of winning, as inhering in the event itself. An- 
other promoter offers a prize for the missing word, which he 
states, in advance, he has selected and sealed in an envelope. 



Lotteries, Frauds and Obscenity in the Mails. 47 

Here the event (the correct word) has been determined and our 
conception of the chance of winning confessedly relates to our 
ignorance of the emergence of the event. A man bets that in 
tossing a dollar heads will turn up and he regards his chance 
of winning as dependent on the event itself. But suppose he 
is blindfolded and after the dollar has been tossed and has 
fallen to the ground, he bets that heads are up. In that case 
he conceives of the chance of success as relating to his. ignor- 
ance alone of what has already occurred. 

A promoter issues one thousand tickets in a lottery scheme 
and advertises that he has selected a certain number as the 
prize ticket, and has locked it up in a safe and offers the prize 
to the adventurer, who may per chance hold the ticket with 
the corresponding number on it. Here the prize ticket has 
been selected and the adventurers regard their chances of win- 
ning as inhering in their ignorance of the event, that is in 
their ignorance as to the number of the prize ticket, and yet 
their conception of chance in this scheme is not the same as in 
the cases above given, unless they have the privilege of select- 
ing the numbers they will pay for. If they have that privilege 
then they are conscious of no other chance than that, which 
arises from their ignorance of the number of the prize ticket 
which has been selected. But if the tickets are drawn and 
sold at random the adventurers at once notice that another ele- 
ment enters into the chance and, that is, they do not know 
the number of the prize ticket nor do they know the numbers 
of the tickets they are to receive and hence their conception 
of the chance in that case has a two-fold aspect in that it relates 
first to their ignorance of the prize number, which has already 
been selected ; second, to a future event, that is to the numbers 
of the tickets they will draw. But suppose the promoter ad- 
vertises that he has issued 1,000 tickets and that when they 
are all sold he will place 1,000 tickets, with numbers corre- 
sponding with the numbers of those sold, in a box or wheel, 
from which they will be drawn out at random and the party 
holding the ticket corresponding in number for instance with 
the hundred and twenty-ninth ticket drawn, shall have the 



48 Lotteries, Frauds and Obscenity in the Mails. 

prize. Here the adventurers know the numbers of the tickets 
they hold and they conceive of the chance of winning as de- 
pendent on an event that is to happen in the future, that is the 
number of the hundred and twenty-ninth ticket to be drawn. 

In all these cases and in a great variety of others that 
might be given the adventurers are conscious of a difference 
in the conception of chance in its relation to the different con- 
ditions named and yet they feel that the probability of winning 
is the same whether they regard the chances as inhering in the 
events themselves, which are to occur in the future, or in their 
ignorance of the events, which have already been determined. 

But this distinction is more apparent than real, for on a 
critical examination we will find that our conception of chance 
whether it relates to an event that has not occurred or to an un- 
known event that has occurred, relates, in fact, to the state of 
our knowledge in regard to the event in both cases. In the one 
case, we are ignorant of what will occur, while in the other we 
are ignorant of what has occurred, and in both cases we ven- 
ture our money solely on account of our ignorance. 

Sec. 27. In this sense chance has the same signification 
as uncertainty or accident. It is philosophically true that 
there is nothing uncertain or accidental in the domain of mind 
or matter. Conditions and causes, though unknown and in 
many cases unknowable, are at work, which operate by im- 
mutable laws and produce inevitable results, as unerringly as 
the laws of the universe hold the heavenly bodies in their or- 
bits, and hence when we speak of uncertainty or accident, we 
merely mean to express our ignorance of the fact or event to 
which we apply the terms and. the terms are proper, so far and 
only so far, as we overlook, or choose for the moment to 
throw out of view the more universal connection of events 
and regard them, as their emergence, on a superficial view, 
appears to be determined. 

Sec. 28. Another mistake made in the discussion of this 
subject has been in disregarding or overlooking the distinc- 
tion between chance and probability. Because in some cases 
the probability of winning was greater than in others it was 



Lotteries, Frauds and Ooscenity in the Mails. 49 

supposed no chance at all was present. If there are only two 
tickets in a lottery scheme, the holder of one of them has one 
chance to lose against one to win. In other words, the chances 
are equal. Issue 1,000 tickets and the holder of one ticket 
has one chance to win against 999 to lose. Issue 1,000,000 
tickets and the holder of one has one chance to win against 
999,999 to lose. Chance, in the scheme, where there are only 
two tickets, is precisely the same as in the scheme where there 
are 1,000,000 tickets but the probabilities as to winning and 
losing are vastly different. In the cases named it is easy to 
calculate the probabilities but there are schemes in which it 
is difficult to determine what the favorable and adverse prob- 
abilities are. Take the case where a newspaper offered a 
prize to the party who would guess nearest the number, con- 
sisting of six figures, of a treasury note, the figures in the num- 
ber being given but not in the order they appeared on the note. 
Here the adventurer would have to determine how many dif- 
ferent possible positions in which the six figures could be 
placed before he could determine the probability of his win- 
ning or losing. There are other cases where the probabilities 
can not be determined in advance at all. Take a case, to il- 
lustrate this class, where the promoter puts 1,000 tickets on 
the market but states that the drawing will occur if 500 tick- 
ets at least are sold. Here the adventurers, at the time they 
invest their money, can not know whether all of the tickets 
will be sold or not and hence they are utterly unable to calcu- 
late, at that time, their chances in the scheme. Again sup- 
pose a promoter should offer a prize to the party guessing near- 
est the degree of temperature the thermometer would mark 
on a given day, one party being entitled to only one guess, the 
number of guessers not being limited. Here the adventurers 
can not calculate the probabilities of winning, because they do 
not know the number of the competitors. Then again the 
probabilities of winning may be increased as the drawing pro- 
gresses. Suppose twenty-five numbers, from one to twenty-five 



50 Lotteries, Frauds and Obscenity in the Mails. 

inclusive, are put in a box, there being one prize number and 
the drawing begins. 

Before any number is drawn out the chance of the prize 
number being drawn is one to twenty-four. After one is 
drawn, it not being the prize number, the chances against it be- 
ing drawn next time are twenty-three to one and so on till only 
one is in the box and then all chance disappears and that the 
prize number will be drawn next time, it not having been pre- 
viously drawn, becomes a certainty. It will be noticed in this 
illustration, that the chance of drawing the prize number is not 
increased as the drawing proceeds, but the chance of its not be- 
ing drawn decreases until the prize number alone remains in 
the box, when all chance, for and against that number being 
drawn next time, disappears. And until that point is reached 
bets could be obtained that the prize number would alone re- 
main in the box but when that point is reached not only all 
chance in the drawing disappears but the possibility of obtain- 
ing a bet on the last drawing from sane men would also vanish. 
But let this suffice on this particular phase of the subject, as 
the Doctrine of Chances or the Theory of Probabilities does 
not come within the scope of this treatise. 

Sec. 28a. Some of the courts have held, at least indi- 
rectly, if not directly, that in order to constitute a lottery pure 
chance must inhere in the scheme. People ex rel. Lawrence 
vs. Fallon, 152 K Y. 12. 

It is not clear what the courts in this and other cases 
meant by "pure chance," for it is not probable that they had 
overlooked a large class of cases in which it was held that the 
schemes constituted lotteries though the chance element 
therein might have been influenced, at least, if not controlled, 
by skill or forethought. 

Black in his Law Dictionary states that "pure chance is 
the entire absence of all means of calculating results;" and it 
may be stated that pure chance exists only in those schemes, 
wherein there is simply a mechanical drawing or selection, 
which can be done as well by a machine or a child as by the 
most intelligent man. In all other schemes such as card play- 



Lotteries, Frauds and Obscenity in the Mails. 52 

ing, horse racing, hazard, etc., skill or knowledge may play 
an important, though not a controlling part. 

Sec. 28b. In the missing word contests which have been 
held to be lotteries where reason and forethought have some 
bearing on the result, the contestants must select from all 
known words a word, which taken in connection with the 
words given, will complete the sense of the sentence and this 
can not be done so well or so correctly by a machine or a child 
without experience or learning, as by an intelligent person in 
the exercise of the reasoning faculty. 

Sec. 28c. Suppose the wheel is resorted to, to supply the 

missing word in this sentence: "She is the most woman 

I ever met." All the words in our language would be put into 
the wheel and a word wholly inappropriate would as likely 
be produced as one that would make the sense complete; in- 
deed the chances that a word wholly inappropriate would be 
produced would preponderate in the ratio of about 10,000 to 
1, as the inappropriate and appropriate words in our language 
for the missing word in the sentence are about in that ratio. The 
same result would follow if a child, which knows nothing of 
the meaning of words, should select the word. The child, in 
such case, would be merely a machine. But suppose an intel- 
ligent man should be asked to supply the word. He would 
at once discard all the manifestly inappropriate words of our 
language and confine himself to the few, probably less than 
twenty-five, that would complete the sense. In the latter case 
can it be said that there is an entire absence of all the means 
of calculating' results or that a machine or child is as likely to 
select the correct word as an intelligent, educated man? And 
yet if a prize should be offered for the correct word in that 
sentence (and by the correct word is meant the word that has 
been or may be arbitrarily selected by the promoter or someone 
else) the scheme would confessedly be a lottery. 

Ses. 28d. It is universally conceded that in tossing a coin 
or die, or turning a wheel or an arrow upon a wheel, it is a 
matter of chance which side of the coin or die will turn up or 
what figure the wheel or arrow will register and yet when we 



52 Lotteries , Frauds and Obscenity in the Mails. 

see what acrobats and slight of hand performers do, we can not 
doubt that men and women too can, by exercise, skill and 
adroitness, apply such force to the coin, die, wheel or arrow 
as to almost unerringly control the result. When we look at 
a man throw six sharp bowie knives into the air in quick suc- 
cession so that they all are seemingly in the air at the same 
time and take each one unerringly by the handle without in- 
jury to himself as it comes down, can we doubt that he could 
acquire the skill to toss a coin into the air so that heads or tails 
would turn up at his pleasure or that he could apply such force 
to a wheel or arrow as to cause it to stop at the point he de- 
sired ? 

Sec 28e. Many of the courts, text writers and lexico- 
graphers, as has been shown, call a lottery a game of hazard. 
Webster defines hazard to be "that which falls or comes sud- 
denly; a fortuitous event; chance; accident; casualty." * * * 
"To run the hazard, to do or neglect to do something when 
the consequences are not foreseen and not within the powers of 
calculation; to take the chance; to risk." He also gives as a 
definition of this word "a game of dice," but marks it obsolete. 

In Chamber's Encyclopaedia, under the title "Hazard," 
it is stated hazard is a game at dice without tables, which can 
be played by any number of persons. After stating how the 
game is played the article concludes thus: "Hazard is ex- 
clusively a game of calculation, and is never played merely 
with a view to amusement. Essentially an essay of calcula- 
tions and combinations, requiring a cool and clear head to exe- 
cute them, it has been an incitement to the wildest schemes un- 
der the name of 'systems/ that ever laughed mathematics to 
scorn. Hazard has been long a standing game at all the 
houses of play in Britain, in the face of a fact that owing to 
the intricacy of the calculations of probabilities the odds in 
favor of the prof essional player over the amateur are 100 per 
cent. 'In spirit, if not to the letter, it is the arithmetic of 
dice.' " 

Sec. 28f. A lottery scheme is also called a game of 
chance, not a game of pure chance; and many of the courts in 



Lotteries, Frauds and Obscenity in the Mails. 53 

the "Option Deal/' liorse race and other cases, hereafter cited, 
compare the chance of the future price of an article, the 
chance in the result of a horse race and the chance when a rail- 
road in process of construction will be completed to the kind of 
chance in the turning of a card or die and betting on such a 
result to betting on a game of faro, brag or poker. Certainly 
experienced men may make reasonable calculations as to the 
future price of wheat or stock or the completion of a railroad 
and yet these events are so uncertain as to justify the courts 
in deciding that making money or property dependent upon 
them is not only gambling but gambling of the same kind as 
with cards or dice. 

Sec. 29. The distinction sought to be made between 
chance in lottery gambling and chance in ordinary gambling, 
requiring pure chance in the former and simply chance in the 
latter is not sound and lottery schemes can not be confined to 
those wherein pure chance is found. ~None of the law making 
bodies in this and other countries has ever, in defining or pro- 
hibiting lotteries, qualified "chance" by the adjective "pure" 
and the courts are not justified in interpolating that qualifying 
term in the statutes. 

In the case of People ex rel. vs. Fallon, 152 X. Y. 12, 
it was not necessary to make the distinction above noted, as 
the court decided that the transaction in that case was neither 
a wager nor lottery and hence it follows that the prize was not 
dependent on either chance or pure chance. 

- The evil the statutes were intended to suppress is gam- 
bling and whatever scheme, having all the other elements of a 
lottery, which appeals to the gambling spirit, and in which a 
prize is made dependent on an event unknown to such an ex- 
tent as to induce men of equal intelligence to risk their money 
or property on the result, should be adjudged a lottery, for in 
such case the prize is made dependent upon chance in its gam- 
bling sense and such scheme begets "a love of making gain 
through the chance of dice, cards, wheel or other methods of 
settling a contingency and has in it all the elements and ten- 



54 Lotteries, Frauds and Obscenity in the Mails. 

dencies, which the Government is seeking to prevent." 
(Horner case.) 

Such a scheme involving snch a chance would undoubt- 
edly be an enterprise similar to a lottery or so called gift con- 
cert, no matter what rule ought to be applied to what have 
been heretofore known as regular lotteries. 

PRIZES DEPENDENT UPON LOT OR CHANCE. 

Sec. 30. Having ascertained the true nature of chance, 
and our conception of it in general, the subject in relation to 
the lottery schemes, mentioned in the Anti-Lottery Act of 
Congress, will now be considered. That act provides that, 
"~No letter, postal card or circular concerning any lottery, so- 
called gift concert or similar enterprise, offering prizes de- 
pendent upon lot or chance," etc., shall be carried in the mails. 
It will not be necessary to determine the difference if there be 
any difference between a lottery, a "so-called gift concert" or 
"similar enterprise." In all three cases, prizes dependent on 
chance, must be offered and the inquiry may, therefore, be di- 
rected, at once, to the meaning of the words in the act, "offer- 
ing prizes dependent upon lot or chance." What a prize is in 
a lottery scheme has already been discussed and determined; 
and we will now inquire when prizes are dependent upon lot 
or chance. In the answering of this question the ingenuity 
and resourcefulness of the gambler find a wide field for debate. 
The gambler insists that, in all human transactions, there is 
chance and he argues that his stake on chance is as legitimate, 
morally and legally, as the money the business man invests in a 
town lot, in a house, in the cargo of a ship, in merchandise, in 
life or fire insurance, in farming and in other transactions be- 
cause he, in any of these ventures, takes his chances of losing 
what he puts in or at least a portion of it or of making a profit 
large or small. That the financial success or failure of human 
transactions is largely dependent upon what we call chance 
can not be denied and it becomes essential to differentiate a 
gambling deal from a legitimate transaction. This differen- 
tiation may be formulated thus: A legitimate transaction in- 



Lotteries, Frauds and Obscenity in the Mails. 55 

volves the giving or delivery of something of value on both 
sides and if there be any chance in regard to the value 
of what is given or delivered on either side each party takes 
that chance as to what he gets and the other party has no fur- 
ther concern about it, while in a gambling deal, a prize, de- 
pendent on chance, is to be awarded to one of the parties. This 
can be made clear by an examination of stock jobbing transac- 
tions. There is no question that two parties may legitimately 
agree that one will buy and the other will sell any article 
of merchandise to be delivered in the future at a fixed 
price or at the market price of the article at the time 
of sale or delivery, provided there is a bona fide 
intention of, at least, one of the parties, that the article shall 
in fact be delivered and paid for and it is equally well settled 
that such parties, having made such a contract, may, after- 
wards, by mutual consent, cancel the contract and agree upon 
the damages the party in default shall pay to the other party. 
But, if at the time of the contract, it is mutually intended 
and understood by all the parties, whether expressed or not, 
that the commodity, said to be sold, was not to be paid for nor 
to be delivered, but that the contract was to be settled and 
adjusted by the payment of the difference in price ; if the price 
should decline, the purchaser paying the difference, if it should 
rise, the seller paying the advance, the contract price being 
the basis upon which to calculate the differences, that would 
be a gambling transaction and void. This distinction has 
been made so often and so universally by the courts that it is 
not necessary to cite any authority in support of it; but it is 
clear from the adjudged cases that in one case money or 
property is not staked on chance or hazard or uncertainty, 
while in the other it is. In the actual sale transaction the 
parties to it do not intend to gamble, wager or bet and what- 
ever profit comes to one above what the other may realize 
is universally held by the courts, and by mankind too, to be 
perfectly legitimate as well as moral, because it is manifest that 
if the courts should recognize unforeseen influences and con- 
ditions unknown at the time or arising after sale which 



56 Lotteries, Frauds and Obscenity in the Mails. 

affect the prices of commodities or things sold, as sufficient to 
annul contracts of sale or barter, the business and commerce 
of the world would, at once, come to an end. In a fair and 
legitimate transaction the parties proceed upon the conditions 
then known to them, and fix the price of the thing sold in the 
light of such conditions and in the absence of fraud, such a 
transaction will stand, though it may turn out afterwards that 
the conditions upon which the parties acted were wholly 
illusory and misleading, whereby one of them made a large 
profit and the other suffered a serious loss. 

Each party to a bona fide sale or trade assumes all the 
chances and takes all the risks of the fluctuation in the market 
of the price of the thing he gets or does not get. After the sale 
or trade each party stands in precisely the same relation to the 
thing he gets as if he had not received it from the other party 
at all but had made it himself or had always owned it. 

Sec. 31. And these observations apply to contracts for 
the future delivery of property at a price fixed at the time of 
the contract or to be fixed by the market price at the time of 
delivery. In such a case nothing is dependent on chance or 
hazard or uncertainty so as to make the contract a gambling 
transaction because, the delivery which is the main thing is 
to be made in any event and the price of the thing delivered, 
whether fixed at the time of the contract or at the time of the 
delivery, is a collateral incident. If the price be fixed at the 
time of the contract, it may not be the same at the time, 
of the delivery or if it be fixed at the delivery, it may not 
be the same as it was at the time of the contract, but in 
either case it is fair for one as it is for the other and this 
variation in the price is not allowed to taint the transaction 
with the immorality of gambling and thereby make it void. 
The courts have held that it is absolutely legitimate to &k 
the price in this way. Both parties to such a transaction get 
quid pro quo and it is a basic principle in Political Economy 
that a fair bargain is a mutual benefit to the persons between 
whom it is made. 



Lotteries, Frauds and Obscenity in the Mails. 57 

Sec. 32. But this is not true of a contract where "mar- 
gins" are deposited and their return, either with or without a 
profit, is made dependent on the fluctuations of the marker, 
in the future in the price of the article, in respect of which the 
deal is made, there being no intention on either side to 
deliver the article itself or pay for it. In such a case one of 
the parties must be loser and the other winner and one will 
get something for nothing and the other nothing for some- 
thing, and the courts have uniformily held that such a contract 
is a wagering transaction and while not always employing the 
same terms they have concurred in the view that by such 
wagering contracts, the parties to it have made the payment 
of money dependent on chance. 

Sec. 33. The Court, in Eumsey vs. Berry, 65 Me. 570, 
speaking of an option deal in wheat, said: "This is what is 
called a settling of the differences, and as such, is clearly 
and only a betting upon the price of wheat." 

Sec. 34. In Fontenbury vs. State, 47 Ark. 188, the 
Court said that the phrase, "dealing in futures," had "acquired 
the signification of mere speculation upon chances" and again 
that wagering contracts are those in which the parties stipulate 
that they shall gain or lose upon the happening of an uncertain 
event ra which they have no interest except that arising from 
the possibility of such a gain or loss. 

Sec. 35. In Lyon vs. Culbertson, 83 111. 33 (25 Am. 
Eepts. 349), the court spoke of an option deal in wheat as 
"only gaming on the price of wheat" as a "bet on the price 
of grain during or at the end of a limited time" and "a gam- 
bling on the price of the commodity." 

Sec. 36. Cunningham vs. Bank, 71 Gra. 400, was an 
action on a note, given on account of dealings, commonly 
called futures, where no intention, on either side, existed to 
deliver or pay for the commodity. The court said: "If this 
is not a speculation on chances, a wagering and betting be- 
tween the parties, then we are unable to understand the trans- 
action. A betting on a game of faro,- brag, or poker can not 
be more hazardous, dangerous or uncertain." 



58 Lotteries, Frauds and Obscenity in the Mails. 

Sec. 37. Eldred vs. Malloy, 2 Col. 320 (25 Am. Kep. 
752), illustrates in a forcible way not only the meaning 
of "chance" in its relation to gaming but also the difference 
between a legitimate transaction and making the payment of 
money depend on chance. That case was an action upon 
a note for $500, which was executed on a wager as to when 
the Colorado Central railroad would be completed to Golden 
City, in the Table mountains. The road was completed 
within the time named in the note. The court thought it 
had enough to do without solving "questions arising out of 
idle bets made on dog and cock fights, horse races, the speed 
of ox trains, the contruction of railroads, the number on a 
dice or the character of a card that may be turned up" and 
could "see no difference in principle in the bet that the 
faro dealer would turn up a jack the next turn and the bet that 
the railroad will be built to Table mountain in so many days." 
Here the wager was on an event that was largely subject to the 
control of one of the parties but it being in a degree uncertain 
the court held the staking of money on it to be a wager, a bet, 
and it being such, placed the transaction on the same plane 
as a bet on the number on a die, or the character of a card 
that might be turned up. In other words the payment of the 
$500 was made to depend on the chance, whether the rail- 
road would be completed within the time named or not, and 
the chance in the case consisted wholly in the fact that the 
event was not known definitely and certainly to the parties 
when the note was given. 

But suppose that the plaintiff in that case had hired the 
defendant to complete the railroad to Grolden City within a 
specified time with a provision, that if not so completed, the 
defendant should pay plaintiff $500, as damages for breach of 
contract and it had been made to appear that that was a 
reasonable sum as compensation for the non-fulfillment of the 
contract within the time specified. In such case there would 
have been no gaming, no bet, no staking money on chance but 
there would have been a legitimate agreement to pay $500 
as a compensation to the party not in default. 



Lotteries, Frauds and Obscenity in the Mails. 59 

Sec. 38. The cases of Johnson vs. Fall, 6 California Keps. 
359 (65 Am. Dec. 518) and Beadles vs. Bless, 27 111. Keps. 
320 (81 Am. Dec. 231) involved also questions in relation 
to the completion of railroads. In the California case the 
contest was in regard to a note, given by the defendant to 
plaintiff, on a wager to the effect that he would pay the 
plaintiff five thousand dollars, two years after date, if within 
that time a certain railroad, in which the defendant was 
interested, was completed and in the Illinois case the contro- 
versy related to an agreement for $100, which was to be paid 
at a designated time, provided the ties and rails were laid 
on a certain railroad by that time. In both cases it was held 
that, as wagers at common law, unless contrary to public 
policy or good morals, were not illegal, the makers of the 
obligations in question were liable thereon, though they grew 
out of wagering transactions. The question of chance was 
not discussed but in the Illinois case the court drew a distinc- 
tion between a wagering contract and an agreement to pay 
money, dependent on a future contingency, in this language: 
a This, in form at least, is simply a contract for the payment 
of money, dependent on a future contingency; and in that 
aspect, is quite unexceptionable. 

a The testimony, however, gives the transaction something 
of the character of a wager, and shows that a similar agree- 
ment was given by the payee to the maker of this agreement, 
payable upon the opposite contingency. But if viewed in 
the light of a wager as we understand the common law, the 
plaintiff has* a right to recover upon it." 

Sec. 39. In Brua's Appeal, 55 Pa. St. 294, which in 
volved an option deal, the court denounced, as gambling any- 
thing which induces men to risk their money or property 
without any other hope of return than to get for nothing a 
given amount from another, no matter by what name it may be 
called and that it is the same whether the promise be to pay on 
the color of a card or the neetness of a horse. 

Sec. 40. Kirkpatrick vs. Bonsall, 72 Pa. St. 155, in- 
volved a dealing in what is called futures. The court said a 



60 Lotteries, Frauds and Obscenity in the Mails. 

bargain for an option may be legitimate and for a proper 
business object and added: "But it is evident such agreement 
can be prostituted to the worst kind of gambling ventures 
and therefore its character may be weighed by a jury, * * * 
whether the bargain was a mere scheme to gamble upon the 
chance of prices. * * * We must not counfound gam- 
bling * * x * with what is commonly termed speculation. 
Merchants speculate upon the future prices of that in which 
they deal. * * * Their speculations display thought and 
forecast but they act upon their conclusions and buy and sell 
in a bona fide way. But when ventures are made upon the 
turn of prices alone, with no intent to deal in the article 
* * * the case is changed. Then the bargain represents 
not a transfer of property but a mere stake or wager upon its 
future price. 77 

Sec. 41. In Pearce vs. Dill, 48 K E. Rep. 788, it was 
shown that Pearce was operating a "bucket shop" and was 
engaged in conducting the business of selling "futures" or 
"options," without having on hand the products he pretended 
to sell and it was mutually understood and intended by both 
parties that the products, claimed to have been sold, were not 
to be delivered but when the time fixed for the delivery the 
market value at Chicago of such products should constitute 
a basis upon which the settlements should be made. As the 
market price would rise or fall there would be a loss or gain 
to the purchaser. The Supreme Court of Indiana said : "The' 
deals or transactions were understood to be a speculation solely 
on chances. * * * Such transactions are of like char- 
acter and akin to bets made on a game of poker or faro, and 
are equally as uncertain and hazardous." 

Sec. 42. ^ In McGrew vs. City Produce Exchange, 4 
S. W. Rep. 38, the Supreme Court of Tennessee, in passing 
on an option deal, said: "It is now settled in this state that 
gaming is not confined to 'playing at any game of hazard or 
address for money/ etc., in the ordinary sense of these words 
as used in the Code S-5688; but that it is 'any agreement 
between two or more persons to risk money or property on a 



. 



Lotteries, Frauds and Obscenity in the Mails. 61 

contest or chance of any kind where one must, be gainer and the 
other loser;' Bell vs. State, 5 Sneed, 507; Enbanks vs. State, 
3 Husk. 488-490. *• * * It matters not what the unlaw- 
ful device is upon which the money is received as a hazard; 
it is gaming." 

Sec. 43. In Golden Kule vs. People, 118 111. 492, it 
was held that where a corporation, upon the death of a mem- 
ber, raises a relief fund by voluntary contributions or dona- 
tions of its other members, not exceeding $2,000, seventy-five 
per cent of which is to be paid to a beneficiary to be named 
by the deceased member in his lifetime and twenty-five per 
cent to the members who may, by chance, hold the certificates 
of membership numbered next above and below that of the 
deceased, its business is not only that of life insurance but it 
is also illegal as to those taking the twenty-five per cent, it 
being in the nature of a wager policy. 

Here we have presented a very clear distinction between 
what is dependent on chance and what is not. The seventy- 
five per cent of the fund was made dependent upon the death 
of the insured and that was to go to the beneficiary as compen- 
sation, in some degree at least, for the loss of the insured, 
while the twenty-five per cent was made payable to 
the members, holding by chance the certificates, num- 
bered next above and below that of the deceased member, and 
hence was made dependent on chance. One was legitimate 
and the other a gambling transaction. 

- Sec. 44. Judge Grosscup in his charge to the jury in 
the McDonald case, 59 Fed. Eep. 563 made some observations, 
in which he undertook to distinguish a legitimate transaction 
from a lottery scheme. On this point he said: "Xow every 
enterprise in which we engage has a return or prize, or is 
supposed to have. That is the incentive which makes men 
industrious and active. Whether that return or prize be de- 
terminable by mere lot or by chance makes it either a legiti- 
mate, enterprise or a lottery, and therefore an unlawful enter- 
prise. We perhaps can illustrate that best by referring to 
some of the schemes of life in which men are engaged. Take, 



62 Lotteries, Frauds and Obscenity in the Mails. 

for instance, the life insurance companies, those that proceed 
either on the stock plan or on the assessment plan. They 
require of the member that he pay in a certain amount of 
money. That is the pecuniary consideration. That money is 
invested, or supposed to be invested, in securities, and when 
the member dies a certain amount, stipulated in the policy, is 
paid to his heirs or the beneficiary named in the policy. That 
is the return. The man may have been insured but a month 
and have paid in but a few dollars, and have received back 
$5,000 or $10,000. In such instances as that a much larger 
sum has been returned than the consideration, but the fact that 
there was such a return does not make it an unlawful enter- 
prise. Why? Because the prize is not determinable by or 
dependent upon chance or lot. It is dependent upon the life 
of a man, and the life of a man is determined by the laws of 
nature and not by the chances of lot. 

So let us take what is called tontine insurance. In that 
class of insurance a man pays for a term of years and then 
receives back his investment, having in the meantime the 
insurance for a certain sum fixed in the policy. Now whether 
the investment paid him is more or less that that, which he has 
paid in, the prize, that he looks to, is not simply the return 
of the money, but the return to his heirs or beneficiary named 
in the policy the amount of the policy in case he dies pending 
that investment. And, as in other companies, the prize may 
be very much larger than the pecuniary consideration paid in 
but it depends again upon the laws of nature, which man is not 
supposed to violate by taking his own life. A man who 
makes an investment in real estate may put in a few thousand 
dollars and take out a million. What he puts in is the con- 
sideration; what he takes out is the prize. It may be a hun- 
dredfold larger than what he puts in, but on what is it depend- 
ent? Upon the growth of the town in which he lives; upon 
the growth of public sentiment respecting the value of property 
in that particular locality; upon the law of growth which is 
itself a natural one, an industrial law. But suppose a man 
puts a iicket in a hat with a hundred other tickets, and then it 



Lotteries, Frauds and Obscenity in the Mails. 63 

is drawn by a blindfolded man, and bis chance of tbe prize 
offered is dependent upon that drawing. The ticket may cost 
bnt 50 cents. The prize may be worth $10, much larger than 
the price of the ticket, though not larger in proportion than 
the life insurance policy or the real estate investment. But 
the getting of the prize is dependent upon the chance or lot 
of his ticket being drawn, not upon any natural law, as a man's 
life, nor upon the industrial growth as the growth of the value 
of real estate. 

This illustrates to you the difference between legitimate 
investments which may yield according to the good fortune of 
the investor a hundredfold more than the amount invested, 
and a gambling investment, according to a lottery which can 
only yield in case the allotment or chance, which is purely 
artificial, turns in his favor." 

Sec. 45. With all due deference to the learned judge, 
who delivered this charge, it is manifest that, applying the test 
of chance, man's ignorance of the outcome of an event, the 
life of an insured person is dependent on chance. So far as 
the insured and the insurer know, life is uncertain. It is 
true death is the result of the operation of natural laws but 
here, as elsewhere, the causes of disease and of death are 
unknown, so that it is impossible to predict the date of death 
or the length of life. If a wager is made dependent on the 
continuance of life of a given individual, there is no question, 
the transaction would be illegal on the ground of the existence 
of chance in it. The true ground of distinction between life 
insurance and a lottery is in the gambling or wagering feature 
alone. In both, as Judge Grosscup clearly shows, there are 
present the elements of consideration and a prize, and accord- 
ing to the views expressed in this work, the chance element 
is also present in both, just as this element is present in many 
legitimate transactions, but in one case there is a wager 
and in the other there is not. This is made plain in the 
"Option Deal" and other cases that have been before the 
courts. In life insurance the money is paid as a compensation 
for the death of the insured, while in a. lottery scheme the 



64 Lotteries, Frauds and Obscenity in the Mails. 

prize is paid as a gratuity. And reduced to its last analysis 
this is the only distinction that can be made between many 
legitimate and many illegal transactions, i. e., in one class 
the transaction amounts to a wager while in the other it does 
not. 

Sec. 45a. Another good illustration of the point under 
review is to be found in the case of Ferguson vs. Coleman, 3 
Kichardsons Law, 99 (45 Am. Dec. 761). At the trial it 
appeared that the plaintiff sold the defendant a tract of land 
and defendant promised, in writing, to pay plaintiff $902.58 
for the land on the first day of January, 1844, if cotton 
ihould rise to eight cents a pound by the first day of Novem- 
ber, and if not to pay $500. Cotton rose to eight cents by 
the time stated. The defendant refused to take the land and 
pay the $902.58 on the ground that the transaction was a 
wager. The Supreme Court of South Carolina disposed of 
this question thus: "The objection to the agreement, that it 
was a wager, is plainly inapplicable ; for the parties had an in- 
terest in the contingency. The defendant purchased the land 
at the lowest price, unconditionally, but contracted to pay a 
larger sum if the value should be enhanced by the increased 
value of its product." 

PRIZES DEPENDENT ON CHANCE, HORSE RACING, ETC. 

Sec. 46. There is another class of cases that illustrates 
what is meant by offering prizes dependent on chance. These 
cases relate to games or contests involving elements of skill, 
endurance, strength,fleetness, adroitness, or knowledge, as well 
as elements of chance or uncertainty, as horse, foot, and boat 
races, dog, bull and cock fights, billiards, pool, etc. It has 
been held, almost without exception, that the putting up of 
money by two or more parties on the result of any one of the 
above games or contests is betting or wagering on the chances 
of the game or contest. That is, the payment of the money 
to one or the other of the parties is dependent on chance. But 
where an association, as a state or county fair, and the like, 
offers a prize to the party entering the fastest horse for a race, 



Lotteries, Frauds and Obscenity in the Mails. 65 

or the best buggy, draft or saddle horse, for the pur- 
pose of encouraging the raising of the best breed of horses, 
or where an institution of learning offers a prize to the student 
who will write the best essay or deliver the best oration in 
order to stimulate mental exertion and development or offers 
a prize to the winner in a foot or boat race in order to encour- 
age physical development, then such prize is not dependent 
upon chance in the sense of gaming or gambling but upon the 
speed or other qualities of the horses entered, or upon the 
mental vigor and attainments or the physical development of 
the students. But if parties should put up money on any of 
these legitimate contests for prizes for the mere risk of getting 
a larger sum, and one of the parties must be loser and the other 
gainer, the transaction is a wager upon the chances of the con- 
test alone. That which differentiates a legitimate contest for 
a prize and illegitimate contest in this class of cases is the 
intent with which the prize is offered. In one case the parties 
do not gamble, while in the other they do. If this test be 
applied little difficulty will be found in distinguishing what is 
moral and legal and even praiseworthy from what is wrong, 
illegal and demoralizing to individuals and society. 

Sec. 47. In Hankins vs. Ottinger, 115 Cali. 454, 40 
Law. Eep. Ann. 76 the Supreme Court of California held 
that "competing for premiums offered by an association on 
horse races is not competing for bets or wagers and an 
agreement between two owners of horses to pool all prem- 
iums and stake moneys awarded on their horses and to 
divide the same equally is valid. The payment of en- 
trance money^to an association as a fee for the privilege 
of competing in a horse race and the adding of this 
entrance money to the premium to be divided equally 
between the first, second and third horses in the race, did not 
tend to impart to the transaction the character of a wager 
between the competitors. After citing the case of Alvord 
vs. Smith, 63 Ind. 58, the court goes on to say: ' There is a 
clear distinction/ " says the Supreme .Court of Judicature of 

5 



66 Lotteries, Frauds and Obscenity in the Mails. 

Indiana, in Alvord vs. Smith, supra, 'between a wager or bet 
and a premium or reward. In a wager or bet there must be 
two parties and it is known before the chance of uncertain 
events upon which it is laid is accomplished, who are the parties 
who must either lose or win. In a premium or reward there 
is but one party until the act or purpose for which it is offered 
has been accomplished. A premium is a reward or recompense 
for some act done ; a wager is a stake upon an uncertain event. 
The two need not be confounded.' " 

Sec. 48. It was held in Alvord vs. Smith, 63 Ind. 58, 
that a premium offered by an authorized corporation or a pri- 
vate partnership to the owner of the horse that should make 
the best and quickest time, or exhibit a certain rate or speed 
in a proposed trial of speed of horses, is not a bet or wager. 

In Porter vs. Day, 71 Wis. Eep. 296, the court held that 
the mere racing of horses is not illegal or against public policy 
and where a premium or reward is offered by a third party, 
in good faith and not as a cover for betting, to the winner in 
such race, the latter may recover the premium, even though 
he paid an entrance fee, which went in part to make up the 
premium. The court, however, remarked, arguendo, that if it 
should be shown that the offering of the prize was a mere 
subterfuge for betting on a horse race it would come under 
the law prohibiting betting and gaming, and cited the case of 
Gibbons vs. Governor, 1 Denio, 170, where it was held that if 
two or more men, owning horses, should contribute equally 
or otherwise a sum for the purpose of offering it as a prize or 
premium to themselves only and to the owner of the horse 
who should win the race, such a transaction came within the 
rule prohibiting betting and gaming. 

The offering of premiums or purses by Fair Associations 
for the fastest horse is not gaming and not illegal. Ballard vs. 
Brown, 67 Nev. 586. 

The deposit of an entrance fee to enable the depositor 
to compete for a prize in an athletic contest is not a bet. 
Costello vs. Curtis, Ts T ew York Supreme Court, 1881, 13 K Y. 
"Weekly Dig. 20. 



Lotteries, Frauds and Obscenity in the Mails. 67 

Sec. 49. But if there be a statute which prohibits horse 
racing for reward and also the contributing or collecting of 
money or property for the purpose of making up a purse, plate 
or prize, then the entrance fees and subscriptions are illegal 
and void. 

Bronson Agricultural, etc., Ass'n vs. Bamsdell, 24 Mich. 
441 ; Comly vs. Hillegrass, 94 Pa. St. 132, (39 Am. Beps. 
774). 

In the Michigan case the court said : "Now it is very clear 
that the racing of the horses on the occasion alluded to, under 
the regulations of this association, and the premium given to 
the owner of the winning horse, as well as the mode of raising 
that premium, come directly within the express prohibitions 
of this Statute. It is none the less a race because the asso- 
ciation chose to designate it a 'trial of speed/ and pretend to 
give the premium for the best horse, when the trial of excel- 
lence is determined by the greatest speed. The 'premium'' 
is but another name for the purse, 'stakes/ or reward, to the 
owner of the animal which shall excel in speed; 'and the mode 
of raising this purse, stakes or reward comes within the express 
prohibitions of the third section.' " 

In the Pennsylvania case the court held that a 
check, given to an agricultural society to enable the drawer 
to enter his horse in competition in a "trial of speed" at an 
exhibition for a premium offered by the society, was void under 
the statute of the state against wagers and horse racing. 

; In Palmer vs. State, 13 S. W. Bep. 233, the Supreme 
Court of Tennessee held that betting money in an authorized 
horse race was gambling, citing, in support thereof, Huff vs. 
State, 2 Swan, 279. The court there refused to pass on the 
que'stion whether pool selling on horse races was a lottery, be- 
cause it was not necessary to decide it. 

These are the leading cases on the question of offering a 
purse or premium for the fastest or best horse in contests of 
strength or speed and the cases which involved the element of 
an ordinary wager on horse races will now be considered. 



68 Lotteries, Frauds and Obscenity in the Mails. 

Sec. 50. The Statute of Kentucky prohibited anyone, 
under a penalty, from engaging "in any. hazard or game on 
which money or property is bet, won, or lost." In Cheek vs. 
Commonwealth, 37 S. "W. Kep. 152, the Court of Appeals of 
' i State, in construing this Statute, said: "Is it, therefore, 
unlawful to bet on a horse race? * * * While a horse 
race has been held, in some of the states, to be 'a game or 
gambling device/ manifestly the word game, as used in our 
Statute, was not meant to embrace such a race and the sole 
question to be considered is what is meant by a 'hazard.' 
It seems to us, beyond question, that to engage in a wager of 
any kind is a hazard within the meaning of that word, as it is 
used in the Statute. A and B may play a game of cards for 
amusement and if C and D stand by and bet on the game, the 
players may be innocent, but the bystanders are guilty; not 
because they engage in the game, but because they wager in 
a hazard on which money is bet. Those who enter the 
horses for the race and the riders may be ever so innocent and 
will be unless they engage in betting on the race, although 
they are actually engaged in the race; but the bystander is 
guilty, without engaging in the race, if he engages in the 
hazard of betting on the result. Such was the construction 
given by this court of a similar Statute in Clark vs. Com. 79 
Ky. 359." 

Sec. 51. In People vs. Weithoff, 51 Mich. 203 (47 
Am. Reps. 557) defendant, Weithoff, kept rooms in Detriot, 
Mich., in which he kept lists and boards, for the purpose of sell- 
ing Auction and Combination pools and Paris mutuals on 
horse races and base ball games, and Judge Cooley, delivering 
the opinion of the court, said : 

"In the- common usage of the two terms 'betting' and 
'gaming' they may sometimes be employed interchangeably 
but not always. If two persons play cards for money they are 
said to be gambling or gaming; but they are gambling because 
they lay a wager or make a bet on the result of the game and 
therefore to say they are betting is equally appropriate. If two 
persons lay a wager on a pending election, it will be said they 



Lotteries, Frauds and Obscenity in the Mails. 69 

are betting, but not that they are gaming. There is no gam- 
ing in which the element of a wager is wanting, but there is 
betting which the term 'gaming' is not commonly made to 
embrace. But the mischievious element against which the 
Statute is aimed is present in all betting where money or other 
valuable thing is staked, and no violence is done to lan- 
guage when all such betting is classed as gaming, as mani- 
festly it sometimes has been in our legislation and to -some 
extent always. * * * Neither do we think it would be 
deemed an inaccurate or inappropriate use of language if all 
betting for money were to be spoken of and considered as 
gaming or gambling. It is so common for persons accustomed 
to speak with accuracy and propriety to apply one or the other 
of these terms to any species of immoral betting that we learn 
the application intended and the precise meaning in any 
particular case only from the connection. Often we find the 
terms 'gaming' and 'gambling' applied to transactions which 
are not illegal in the sense of being immoral, but which 
involve the element of wager as in the case of option con- 
tracts. * * :f * That the pooling schemes contemplated 
putting money at stake upon the issue of games is not denied. 
They had in view base ball games, which are games in the 
strictest sense, and also horse races. These last have often 
been held games, within the meaning of the statute of Anne, 
when made for wagers. Goodburn vs. Marley, Str. 1159; 
Blaxton vs. Pye, 2 Wils. 309; Grace vs. McElroy, 1 Allen, 
563; Tatman vs. Strader, 23 111. 493; Mosher vs. Griffin, 51 
Id. 184; Ellis vs. Beale, 18 Me. 337 (37 Am. Dec. 726); 
Cheesum vs. "State, 8 Blackf. 332; Wilkinson vs. Tousley, 16 
Minn. 299 ; McLain vs. Huffman, 30 Ark. 428. So have been 
dog fights (Eagerton vs. Furzeman, 1 C. & P. 613), and foot 
races (Lynall vs. Longbothom, 2 Wils. 36), and cock fighting 
(King vs. Howel, 3 Keb. 465; Squires vs. Whisken, 3 Camp. 
140; Bagley vs. State, 1 Humph. 486; Johnson vs. State, 4 
Sneed, 614; Commonwealth vs. Tilton, 8 Met. 232). * * * 
The word 'games' is very comprehensive, and embraces every 
contrivance or institution, which has for its object to furnish 



70 Lotteries, Frauds and Obscenity in the Mails. 

sport, recreation or amusement. Let a stake be laid upon the 
chances of the game, and we have gaming. Eminent judges 
have thought the pooling scheme was to be considered a game. 
Tollett vs. Thomas, L. R, 6 Q. B. 514; Scollans vs. Elynn, 
120 Mass. 271-3; and it .was so decided in Edwards vs. 
State, 8 Lea, 411. It does not furnish sport, recreation or 
amusement, except so far as the excitement of the choice of 
chances may furnish it ; but this is true of many contrivances, 
which are always called games and which the law aims to sup- 
press. There is no good reason for a distinction between 
pooling and such games. " 

Sec. 52. The Court of Appeals of the Eirst District of 
Illinois in Swigart vs. The People, 50 Ct. App. Keps. 181, in 
1892, held that selling pools on horse races was selling pools on 
a "game." 

In Bamble vs. State, 63 Md. 242, it was held by a divided 
court (four to three) that the selling of cards and tickets at 
a "mutual pool" on horse races is not keeping a gambling table 
under the Maryland Statute, because the purchasers did not 
bet their money on a game of chance. 

Sec. 53. In Com. vs. Simonds, 79 Ky. 618, it was held 
that pool selling on a horse race was wagering on a game of 
chance, and cited Tollett vs. Thomas, L. B. 6 Q. B., 415, in 
support. It was also held that the keeper of the pool room 
did not bet as he lost nothing — he simply got 5 per cent of the 
money paid in. The outsiders lost the money. 

Sec. 54. In State vs Shaw, 39 N W Kep. 305, the 
Supreme Court of Minnesota held that horse racing is a game 
and betting on a horse race, is gambling which the court de- 
fines to be "risking of money or other property between two 
or more persons on a contest of chance of any kind where 
the one must be the loser and the other the gainer" 

Sec. 55. In Tatman vs. Strader, 23 111. K. 439, it was 
held that horse racing was a game, within the meaning of the 
Illinois Statute which provided that anyone might recover 
back money won from him "at any gaming or playing at 
cards, .lice or any other game or games." 



Lotteries, Frauds and Obscenity in the Mails. 71 

The Court cites Clayton vs. Jennings. ■ 2 Blackst, 706, 
where it was held "that betting on a horse race was betting on 
a game, and unlawful and void, although the game itself was 
not unlawful." The English court in the latter case said: 
"And Askton, J., mentioned the case of Cannon vs. Quick, in 
the King's Bench about ten years ago, when the court took 
a distinction between running a horse for (fifty pounds) £50, 
which was unlawful, and betting on the side of the horse which 
was not so." 

Sec. 56. In Harlen vs. U. S., 1 Morris (Iowa), 169, 
the court said: "It is said a horse race is not only uncertain 
in its results, but it is often dependent upon accident. So 
is almost every transaction of human life but this does not 
render them games of chance. There is a wide difference be- 
tween accident and chance. The one is intervention of some 
unlooked for circumstances to prevent an expected result, the 
other to the uncalculated effect of mere luck. The shot dis- 
charged at random strikes its object by chance, that which is 
turned aside from its well directed aim by some unforeseen 
circumstances misses its mark by accident. In this case, there- 
fore, we reasonably feel disappointed, but not in the other, 
for blind uncertainty is the chief element of chance. In fact, 
pure chance consists in the entire absence of all means of cal- 
culating results, accident in the unusual prevention of an effect 
materially resulting from the means employed. That the 
fleetest horse sometimes stumbles in the race course and leaves 
the victory to its more fortunate antagonist is the result of 
accident, but the gambler whose success depends upon the turn 
of the cards or the throwing of the dice trusts his fortune to 
chance. It is said there are strictly few or no games of chance, 
but that skill enters as a very material element in most or all 
of them. This does not, however, prevent them from being 
games of chance within the meaning of the law. There are 
many games, the result of which depends entirely upon skill. 
Chance is no wise resorted to in these. Such games are not 
prohibited by the Statute. But there are other games, which, 
although they call for the exercise of such skill, there is an 



72 Lotteries, Frauds and Obscenity in the Mails. 

intermingling of chance. The result depends, in a very consid- 
erable degree, upon sheer hazard. These are the games against 
which the Statute is directed and horse racing is not included 
in that class." 

PHIZES DEPENDENT UPON LOT OR CHANCE ; MISCELLANEOUS CASES. 

Sec. 57. Only a few of the miscellaneous cases in which 
the question when money or property is made dependent upon 
lot or chance will be examined. 

Sec. 59. In Murphy vs. Bogers, 24 K E. Eep. .35, it- 
was held by the Supreme Judicial Court of Massachusetts that 
playing billiards or pool where the defeated party was to pay 
for the use of the table or implements used in playing or for 
liquors or cigars to be used by the prevailing party amounted 
to gaming within the meaning of a Statute which provided that 
all notes, given for money or goods, won at gaming, shall be 
void as between the parties. In support of this proposition, 
the court cited State vs. Leighton, 23 NV H. 167; State vs. 
Book, 41 Iowa, 550; State vs. Manser, 7 Iowa, 406; Ward 
vs. State, 17 Ohio St. 32; Walker vs. State, 2 Swan, 287; Com. 
vs. Taylor, 14 Gray, 26; and Com. vs. Gourdin, Id. 390. 

Sec. 60. In Ee Lee Tong, 18 Fed. Eep. 253, Judge 

Deady, remarked: "The coin of the , when used to play 

games of 'mabee' 'heads or tails,' 'odd or even/ for money or 
other thing of value; a long and short straw when used to play 
the game of 'draw straws 7 for the same purpose; a wheel of 
fortune or a 'Grab Bag' when used at church fairs or festivals 
or elsewhere to dispose of articles of value upon the chance 
of getting something for comparatively nothing, are each 
and all of them so far just as much gambling devices as cards 
or dice can be. In short anything which is used as means 
of playing for money or other thing of value so that the result 
depends more largely on chance than skill is so far a gam- 
bling device." 

Sec. 61. In State vs. Debay, 23 S. E. Eep. 167, the Su- 
preme Court of North Carolina held "that the putting up by 
each of several persons of a piece of money and the deciding by 



Lotteries, Frauds and Obscenity in the Mails. 73 

throwing dice which of such persons should have a certain 
turkey constitutes a game of chance." The court remarked 
"it mur/t be noted that this decision has no application to the 
long prevailing custom of shooting for beef, shooting at tur- 
keys and other similar trials of skill. It is true, that there 
each participant pays for the privilege or so-called chance of 
shooting for the prize ; but there is no chance in the sense of 
the acts against gambling. These are trials of skill which the 
law has never discouraged and not games of chance in any 
sense. Nor does the Statute prohibit the social diversions in 
which the hostess offers prizes for the most successful players 
at cards or other games. Those are not games of chance 
where the players bet nothing. They lose nothing, if unsuc- 
cessf dl and pay nothing for the chance of winning." 

Sec. 62. In Hamilton vs. State, 25 Ind. 426, the court 
said: "We think that sound reason supports the authorities 
that hold such playing as is charged (pool or billiards) in this 
case tj be gaming. The manifest purpose of the legislature 
in its various enactments on the subject of gaming has been 
to make unlawful all games of chance by which money or 
other acticle of value may be lost or won, and the evil effects of 
risking small sums on the result of skill at billiards is less in 
degree only than the hazard of larger stakes at other games." 

To the same effect is Alexander vs. State, 99 Ind. 450. 
There the loser at the game of billiards had to pay the keeper 
of the table. The court said: "At the end of each game he, 
(the winner), was ten cents better off than if he had lost the 
game, and ]ie was five cents better off than he would have 
been, if without any chance or hazard, each party had paid for 
his cu-j." 

Ses. 63. In Wortham vs. State, 59 Miss. 179, the court, 
holding that billiards is not a game of chance, said: "It may 
be true that, in the playing of all games, there is to a greater 
or less degree an element of chance in the sense that an un- 
expected result follows the peculiarly skillful or negligent act 
of the player, but this is not the chance which brings the 
game within the condemnation of the statute, for in such cases 



74 Lotteries, Frauds and Obscenity in the Mails. 

the chance, or more properly the accident, occurs occasionally 
and is not inherent in the game. The games included in this 
statute, we think, are those only in which the game itself is 
decided or some advantage therein is lost or gained by the 
player or some third person doing an act which is required 
by some rule of the game to be done, the result of which is de- 
termined b} chance and not by the skill of the actor and which 
is required to be done because of the accidental character of 
its consequences, to the end that chance may enter as an ele- 
ment in the game. It is the character of the game and not 
the skill and want of skill of the player, which brings it into 
or excludes it from the prohibition of the statute." 

Sec. 64. The difference between games of chance and 
games of skill was discussed pretty fully in State vs. Gupton, 
8 Ired. (N. C.) L. 271. The defendant was indicted for play- 
ing a game of ten pins under a statute of North Carolina, 
making it a criminal offense to play a game of chance at any 
gambling table. The court held that the statute, having used 
the words "game of chance," should not be made to include 
games of skill. The court said, "therefore, it is apparent 
that those games are specified in contradistinction to other 
games, which are not games of chance. In other words, those 
terms must be understood in their plain, popular sense, as de- 
scriptive of a certain kind of games of chance in contradistinc- 
tion to a certain other kind, commonly known as games of skill. 
Though our knowledge on such subjects is very limited, yet we 
believe that in the popular mind the universal acceptation of 
a "game of chance" is such a game as is determined entirely 
or in part by lot or mere luck, and in which judgment, prac- 
tice, skill or adroitness have honestly no office at all or are 
thwarted by chance. As intelligible examples the games with 
dice are determined by throwing only, and those in which 
the throw of the dice regulates the play, or the hand at cards 
depends upon a dealing with the face down, exhibit two class 
of games of chance. A game of skill, on the other hand, is 
one in which nothing is left to chance ; but superior knowledge 
and attention, or superior strength, agility and practice gain 



Lotteries, Frauds and Obscenity in the Mails. 75 

the victory. Of this kind of games, chess, draughts or. 
chequers, billiards, fives, bowles and quoits may be cited as 
examples. It is true that in these latter instances superiority 
of skill is not always successful — the race is not necessarily to 
the swift. Sometimes an oversight, to which the most skill- 
ful is subject, gives an adversary the advantage; or an unex- 
pected puff of wind or an unseen gravel in the way may turn 
aside a quoit, or a ball and make it come short of the aim. 
But if those incidents were sufficient to make the games, in 
which they may occur, games of chance there would be none 
other but games of that character. But that is not the mean- 
ing of the statute, for as before remarked, by the very use of 
those terms, the existence of other kinds of games, not of 
chance, is recognized. The incidents mentioned whereby the 
more skillful may be the loser are not inherent in the nature of 
the games. Inattention is the party's fault and not his luck, 
and the other obstacles, though not perceived nor anticipated, 
are occurrences in the course of nature and not chances. They 
are indeed sometimes inaccurately called so, as one hears 
chances of war used to excuse losses by means not foreseen but 
which might, and though out of the usual course of things, 
ought to have been foreseen and provided against. For the 
art of war is surely a science and the results of certain powers, 
movements and combinations may be almost mathematically 
calculated. In the same manner, comparing small things 
with great, there are games of skill, purely such, although the 
better player may, in particular instances, fail to win through 
the want of w attention or energy and not the blindness of 
chance. In that sense ten pins, as understood by us from the 
description in the case, is not a game of chance but of skill. 
jSTothing is referred to chance; but as in billiards, a just esti- 
mate of distances and angles, steadiness of hand and a due 
application of strength constitute, under ordinary circum- 
stances, the judicious and successful player." 

Sec. 65. Wagers have been laid upon the sex of a child 
expected to be born, DeCosta vs. Jones, 2 Cowp. 729; upon 
the future amount of the public revenues, Atherford vs.Beard, 



76 Lotteries, Frauds and Obscenity in the Mails. 

2 Tenn. Kep. 610; upon the non-marriage of a party within a 
certain time, Hartley vs. Rice, 10 East 22; upon a question of 
law, Henkin vs. Guerss, 12 East 247; upon the death of a cer- 
tain person at a particular time, Gilbert vs. Sykes, 16 East 150 ; 
upon the particular carriage a certain person will travel in, 
Eltham vs. Kingsman, 1 Barn, and Aid. 683; upon the con- 
viction of a certain person on trial on a criminal charge, Evans 
vs. Jones, 5 Mees. and W. 82; upon how a prohibited game 
should be played, Brown vs. Leeson, 2 H. Black. 43; upon 
the reversal or affirmance of a decree in chancery by the 
House of Lords, Jones vs. Randall, 1 Cowp. 37 ; upon the pur- 
chase or non-purchase of a wagon by a third party of a fourth, 
Good vs. Elliott, 3 Term Rep. 693; upon the name of a person 
the parties had seen, Bland vs. Collett, 4 Comp. 157; upon 
the question whether one of the parties was older than the 
other, Hussey vs. Crickett, 3 Comp. 168; upon which of two 
persons would die first, Earl of March vs. Pigot, 5 Burr 2802 ; 
and upon the result of elections in innumerable cases; note to 
Bernard vs. Taylor, 37 Am. St. Rep. 702. 

Sec. 6Q. A most intelligent and exhaustive discussion in 
regard to the nature of chance is to be found in the opinion 
in Goodman vs. Cody, 1 Wash. T. 329. The Statute of Wash- 
ington Territory provided that a verdict might be vacated 
"whenever one or more of the jurors shall have been induced 
to assent to any general or special verdict other and different 
from his own conclusions and arrived at by a resort to the- 
determination of chance or lot." In the case above cited it 
appeared that a verdict was reached in this way: By agree- 
ment among the jurors they severally set down on paper the 
amounts they respectively thought fit and the sum of these 
amounts, divided by the number of jurors, was the amount of 
their verdict. Greene, Associate Justice, delivering the opin- 
ion of the court, said: "What is chance? It is said by i 
learned judge in a case cited (Turner et al. vs. Tulumne County 
Water Co., 25 Cal. 402), that a verdict found by average 
can not be called chance, because derived from sums, the 
result of intelligent action of individual jurors by means of the 



Lotteries, Frauds and Obscenity in the Mails. 77 

most accurate of the sciences. But for all the exact science, 
had to do with the matter, he who gave the opinion might as 
well have held that were twenty dice cast, and the sums turned 
up added together, the aggregate divided by twelve and the 
quotient taken for a verdict, such a verdict would not be got 
by determination of chance, because got by the most accurate 
of sciences. The learned judge erred doubly: First, he 
overlooked the fact the verdict is already determined and fixed 
as soon as the twelve sums are ascertained, and before the 
exact science is applied within the maxim Id cerium est, quod 
certum fiat; and second, he evidently mistook the nature of 
chance, falsely fancying that what is certain in result or is 
brought about by known or intelligent agencies can not be 
said to result from chance. * * * The word chance has 
not been adopted or defined as a law term, is not technical and 
must be deemed used by the legislature in the popular sense. 
According to the generally accepted and ordinary use of the 
word anything is said to have happened by chance to anyone, 
which was neither understandingly brought about by his act, 
nor pre-estimated by his understanding. If one move his 
arm inconsiderately and by the movement unintentionally 
break a crystal vase, we may say he did it by chance; for his 
intelligence did not from step to step estimate or direct the ac- 
tion to its result. Yet, although the result was a chance one, 
it was the certain, inevitable result of assured relative positions 
of the arm and the vase, and the muscular action, perhaps 
voluntary, of the former. Again, when a die is thrown, the 
position in which the die will fall is a necessary effect from well 
known but unestimated causes by the original position of the 
die, its size, form and weight, the manipulation given it, the 
distance and velocity of the throw, the sort of surface it falls 
upon, and perhaps other things; the final position of the die 
is determined with the mathematical certainty, and may, by 
any painstaking mathematician possessed of the elements of 
the problem, by the use of the most accurate of the sciences, 
be calculated with infallible precision. Still we say, and 
properly say, that the final position of the die is determined by 



78 Lotteries, Frauds and Obscenity in the Mails. 

chance ; and by this we mean, not that the result of the throw 
was uncertain or a consequence of unknown causes, but that 
it was produced by causes, the efficient and proportionate 
operation of which was, in fact, by the person to whom it 
chanced neither estimated nor intelligently controlled for the 
accomplishment of the result. With the same propriety, we 
speak of meeting by chance a person at a certain place at a cer- 
tain time; and thus no matter how exactly we have pre- 
calculated and intended being ourselves at that particular tima 
nor how exactly that person may have precalculated and in- 
tended being at the same place at the same time likewise, 
provided we, to whom the chance happens, did not precalculate 
nor consciously bring about the meeting then and there. 

"From the popular use of the word 'chance' as illustrated 
in these examples, it seems plain to us that a juror resorts 
to the determination of chance for a verdict, whenever he 
resorts to any method, the steps and results of which are 
beyond his calculation and unfollowed and unparticipated in 
by his understanding and all the jurors resort to such a method 
when they resort to the method of average. "With a verdict 
got fairly as between the jurors, by such a method, the con- 
clusion attained by the intelligence of any one juror never 
coincides, unless the average of the conclusions of all the 
jurors happens to be identical with his own; whereas, in a good 
verdict, every element of chance is eliminated by the fact that 
before the verdict is complete, every intelligence on the jury, 
being first well apprised of the action of the others, has, by its 
own individual conscious action, ratified and arrived at the same 
conclusion with every other. In a verdict got by the method 
of average every sum that goes to develop the verdict is a 
chance sum as to each juror, save the sum the juror himself 
sets down; and the verdict is not redeemed from being a 
chance verdict as to each juror, and therefore chance as to all, 
by the fact that each has contributed to it an element not of 
chance any more than a dice thrown would be redeemed from 
being chance by the fact that the throw was in part controlled 
by certain intentional motion of the dice box." 



Lotteries, Frauds and Obscenity in the Mails. 79 

Sec. 67. The cases in regard to wagers in general have 
been reviewed and cited thus extensively for the purpose of 
presenting the views of the various courts on the question 
of chance and what it is to make the payment of money de- 
pendent upon chance. In many of these cases statutory pro- 
visions had a controlling influence. But one can not read the 
opinions of the courts on this subject without being impressed 
with the proposition that chance, after all, consists in our 
ignorance of the event upon which a wager is laid, rather than 
upon anything that inheres in that event itself. If a man 
does not know whether an event will turn out one way or the 
other and he stakes money on it, as to him the event will 
happen by chance, because it is brought about without his 
will or choice. 

Sec. 68. In the review of these cases a distinction must 
be made between those where the party wagered his money 
upon some act to be performed by himself and those where the 
result depended upon the act of another person or upon the 
act of a dumb brute which was to be controlled by another 
person. In the former cases the bettor may, very well, be 
regarded as entering the contest with another motive than the 
mere winning of money and as feeling that the result depends 
largely on his own effort, while in the latter cases he stakes his 
money not on his own ability to bring about the result accord- 
ing to his will but simply on his opinion of what another per- 
son or some animal, can do. A boy playing marbles for "keeps," 
a marksman at a shooting match for beef, turkey or other 
prize, and a party entering a foot or boat race or some athletic 
contest care less about what is to be won than the glory of 
becoming a champion. It is not to be inferred from what 
is here said that a party may not be guilty of gambling upon 
an event to bring about which he personally participates in 
the contest but these obesrvations are intended to point the 
distinction in the two classes of cases above mentioned. The 
distinction is broad and wide between what a party may do 
and what he thinks another can or will do and especially what 



80 Lotteries, Frauds and Obscenity in the Mails. 

he thinks a horse or other animal under the control of a third 
person can do. 

It is important to keep this distinction in mind in the re- 
view of the foregoing cases because in many of them the 
parties staked their money on the result of games or contests 
in which they personally participated. 

These cases, involving ordinary wagers, have been re- 
viewed for another purpose and that is to show what a wager 
is, because that is not only a very important but an essential 
element of a lottery scheme and one can not escape the con- 
clusion that if this fact had been kept steadily in mind by the 
courts the results in some of the cases would have been 
different. 

NON-ESSENTIALS OF A LOTTERY SCHEME. 

Sec. 69. Having ascertained and stated the essential 
elements of a lottery scheme, what is not essential in such a 
scheme will now be briefly stated. 

1. In order to constitute a scheme a lottery or similar 
enterprise it is not necessary that it should specify the method 
by which the award of the prizes should be made. 

In Wooden vs. Shotwell, 23 K J. L. (loc. cit.) 470, it 
was held that the chance element inhered in a scheme for the 
sale of lots of land, though the contract provided that the prize 
lots should be awarded in the manner to be agreed upon by the 
parties interested, i. e. by the adventurers. . 

In Thomas vs. The State, 59 Illinois, 160, the court 
held a scheme for the distribution of $200,000 in presents "in 
a just and legal manner " to be a lottery. 

It was urged in defense of this scheme that no plan of 
distribution of the prizes had been determined upon; that the 
purchasers were to receive certain articles "in a just and legal 
manner" and that a plan might at the proper time be devised, 
which would neither violate the law nor contravene good 
morals. In reply to this contention the court said: "The 
distribution was to be in a just and legal manner. It should 
then be in an honest, upright and equitable mode. There 



Lotteries, Frauds and Obscenity in the Mails. 81 

should be perfect fairness and equality. This plan would be 
utterly violated, if any one of the numerous purchasers should 
fail to receive a prize. The distribution could not be in a just 
and legal manner, unless the number of the purchasers was the 
same as the number of the prizes and the prize received pro- 
portional, as nearly as possible, to the amount of money paid." 

And so in Lynch vs. Kosenthal, 42 K E. Eep. 1103; 31 
Law Eep. Ann. 835, it was held by the Supreme Court of 
Indiana that in a town lot scheme, the chance element inhered 
in the award of the "prize lot," though the contract provided 
it should be given away and should be awarded in some manner 
to be agreed upon by the parties interested. 

And in England the same rule prevails. In Morris vs. 
Blackman, 2 H. and C. 912, where presents were to be "im- 
partially divided among the audience and given away," the 
scheme was held to be a lottery. 

In McLanahan vs. Mott, 73 Hun. 131, $400,000 was to 
be set apart at each semi-annual payment of interest to redeem 
bonds to be designated by a named trustee at their maturity 
value. The ether elements of a lottery being found to be 
present the court held the scheme a lottery. 

2. It is not necessary that there should be any 
blanks. In many of the cases, which will be hereafter re- 
viewed, every investor received something of value, but the 
articles distributed were either not of the same kind or not of 
the same value. 

-3. It makes no difference whether the investors get all 
their money back or not, if prizes are given by lot or chance to 
some and not to others. This was specifically decided in the 
Horner case. 147 IT. S. 449. 

4. It is not necessary that there be any drawing by the 
promoter, oftentimes the investors doing the drawing. 

5. It is not necessary that there should be tickets. This 
will appear in the most of the guessing contests. The tickets 
may be in the form of bonds as in the Horner and Bon<! 

6 



82 Lotteries, Frauds and Obscenity in the Mails. 

Investment cases hereafter oited or in the form of coupons, or 
keys, etc., etc. 

Sec. 70. A lottery may exist even where there are no 
blanks. Some of the courts have said that a lottery is a scheme 
in which all except the prize tickets are blanks. In a sense this 
is incorrect. In many of the scehmes that have been adjudged 
lotteries by the courts apparently there were no blanks, for 
all investors drew something of value; and yet in a certain 
sense there are blanks in all lotteries. While the scheme 
may be such, that all investors draw something of value, yet 
that something, very frequently, does not constitute a prize, 
for the simple reason, that it is not of the same value 
as, but of less value than the amount invested, and in 
such case it would be in line with the exact truth 
to say that some of the investors draw blanks. Take the 
Horner case for an illustration. All holders of the Austrain 
bonds in that case were guaranteed the amount of money they 
invested, with interest, soon or late, but at the periodical 
drawings some of the numbers drawn entitled the holders of 
certain bonds, not only to the principal and interest of the 
bonds, but also to prizes ranging in amount from 400 florins 
to 250,000 florins. The holder of a bond, who drew the 
lowest prize of 400 florins, could not be said to have drawn 
a blank, though another more fortunate adventurer, in the 
same enterprise, may have drawn a prize of 250,000 florins. 
Both drew prizes, that is they both received more than they 
invested The adventurers, however, whose bonds were not 
drawn for payment, with a bonus, may very well be held to 
have drawn blanks, at least for that particular drawing. They 
retained, nevertheless, their chances for prizes in the future 
drawings. The same may be said of the so-called Bond In- 
vestment schemes. At stated periods, according to these 
schemes, certain bonds were reached and paid, with large pro- 
fits, constituting prizes, while the holders of the other bonds 
failed to get anything, but the latter, so long as they continued 
to pay their dues, retained chances for prizes in the future. 
But there are other cases where there seem to be no blanks 



Lotteries, Frauds and Obscenity in the Mails. 83 

and the courts have gone so far as to say, in some of them, 
that there were no blanks. Take the cases of Seidenbender 
vs. Charles, 4 Serg. and Kawle, 151 (8 Am. Dec. 682), and 
Dunn vs. The State, 40 Illinois, 465, as illustrating this class of 
cases. In Seidenbender vs. Charles, each adventurer drew a 
lot of land but the scheme was held to be a lottery, because 
the lots were of unequal value, some being worth much more 
and some much less than the uniform price, which each ad- 
venturer was required to pay. Tilgman, Chief Justice of the 
Supreme Court of Pennsylvania, on this point, remarked: "If 
it be said that in this case there are no blanks, I answer that no 
material difference arises from that circumstance. Some of the 
most fraudulent lotteries ever known have been those in 
which there were no blanks. They are an imposition on the 
folly of mankind; for of what importance is it, if a man who 
pays a considerable sum for a ticket has a prize of very little 
value V 

In Dunn vs. The People, 40 Illinois, 465, prizes, ranging 
in value from a cheap trinket to a grand piano, were offered to 
the public. There every adventurer drew something and yet 
the scheme was held to be a lottery on the ground that the 
prizes were of unequal value. The Supreme Court of Illinois 
denounced this scheme in the following language: "If it 
differs from ordinary lotteries, the difference is chiefly in the 
fact that it is more artfully contrived to impose upon the 
ignorant and credulous, and is, therefore, more thoroughly 
dishonest and injurious to society." 



CHAPTER III. 

A review of the schemes, supposed to have been lotteries, 
which have been before the Courts and the Postoffice Depart- 
ment. 

Sec. 71. The various schemes which have been before 
the courts and the Postoffice Department and which it was 
claimed contained all the essential elements of a lottery scheme 
will now be examined and reviewed in order to illustrate and 
elucidate the principles discussed in the last chapter. It is 
not deemed necessary or prudent even to undertake to explain 
the methods adopted by the operators cf regular or avowed 
lotteries in th collection or distribution of money for in such 
lotteries all the essential elements of a lottery are to be found. 
The prime object of this work is to enable the courts and the 
postal officials and other interested parties to reach just con- 
clusions in regard to those schemes, which appear under allur- 
ing names and are ingeniously devised to deceive the public 
and prevent detection. A gambler infinitely prefers to ad- 
vertise a scheme that he can call a lottery, because he knows 
that the public regards the distribution of prizes by a drawing 
as the fairest that can be adopted. In an avowed and regular 
lottery, honestly conducted, every adventurer feels he has 
a fair chance to win the prize, but this is not so in the numer- 
ous enterprises, which, while retaining all the elements and 
evil tendencies of a lottery scheme, seem to have eliminated 
from them the safeguards which the people desire. If lotteries 
are to be operated, it is infinitely better that they should be 
under government supervision, so as to guaranty honesty in 
conducting them. But the policy of our country is unalterably 
fixed for the suppression of all lottery gambling so far as laws 
can accomplish that result. This is attested by the constitu- 

(84) 



Lotteries, Frauds and Obscenity in the Mails. 85 

tions and laws of all the States and by the laws of Congress. 
One fact is settled and that is no more lotteries are to have the 
sanction of law in the United States. In order, therefore, 
to meet the demand for that kind of gambling, irresponsible 
and oftentimes dishonest promoters present to the people gift 
enterprises, gift-concerts and other schemes under false dis- 
guises and aie unable or unwilling to award the prizes they 
offer to the legitimate winners. These promoters can, in the 
most of cases, if they choose, either fail to award the prizes at all 
or award them to some one who is on the ground floor with them. 
The contest, whatever it may be, can be determined and the 
party, who is to receive the prize, ascertained before the 
scheme is advertised and the adventurers would have no means 
of detecting the fraud. But it seems Ihe gambling spirit is 
so strong in some people that they are willing to invest and do 
invest money in the wildest and most preposterous enter- 
prises. 

This review of lottery schemes will not include the 
methods of the Louisiana or other regular lotteries, but will 
include only gift enterprises and other schemes which do not 
bear the name of lottery but which were supposed to be lot- 
teries or in the nature of lotteries. 

GIFT CONCERTS AND GIFT ENTERPRISES. 

Sec. 72. "A Gift Enterprise, in common parlance, is a 
scheme for the devision or distribution of certain articles of 
property, to be determined by chance, among those who have 
taken shares in the scheme." Anderson's Law Dictionary, 
488. 

This definition is scarcely broad enough to embrace all 
schemes which may properly be termed gift enterprises. A 
definition more nearly correct should be formulated thus: 
The transfer of rights of independent value in money or 
property, together with the right, in consideration of the pay- 
ment of value, to a chance for a prize, may be called a gift 
enterprise. 



86 Lotteries, Frauds and Obscenity in the Mails. 

And the Supreme Court of the United States in the 
Horner case held that a gift enterprise was similar to a lottery 
or a gift concert and was therefore embraced within the Anti- 
Lottery Act of Congress. 

Sec. 73. Gift Concerts and Gift Enterprises, to consti- 
tute gambling or lottery schemes, must contain an element of 
chance. It is true that in these schemes, the adventurers 
receive what is equal, or at least what is held out by the 
promoters to be equal in value to what they invest and hence 
to that extent there is an element of certainty in them but 
every gift concert or gift enterprise in the nature of a lottery 
must also have in it an element of chance ; that a prize, in ad- 
dition to the thing sold, must be awarded Ly chance. 

The Supreme Court of the United States, in the Horner 
case, 147 U. S. 449, in construing the Anti-Lottery Act of 
Congress, in its application to the issue of the Austrian pre- 
mium bonds, said: "What is called in the Statute a so-called 
gift concert has in it an element of certainty and also an ele- 
ment of chance; and the transaction embodied in the bond in 
question is a similar enterprise to lotteries and gift concerts. 1 ' 

Judge Beatty in the case of U. S. vs. Wallis, 58 Fed. Rep. 
942, construing the same act, said: "It is well settled that 
so-called gift enterprises and all similar schemes, in which each 
purchaser of a ticket is given something of value equal to its 
cost, when connected with a drawing by chance for prizes to 
be received by some aud not others, are lotteries." 

Sec. 74. In Long vs. State, 74 Md. 565, Long was in- 
dicted for violating Sec. 185, Art. 27 of the Maryland Stat- 
utes, which p inhibits anyone to sell wares, goods or merchan- 
dise holding out as an inducement "any scheme or device by 
way of gift enterprise of any kind or character whatever." 
Long kept a store, and displayed in his show window a number 
of packages of "Bonanza Coffee" and pieces of crockery 
ware and a notice or card to this effect: "A piece of this 
crockery ware given with each pound." Each package of 
coffee had round it a slip, blank on the outside but on the 



Lotteries, Frauds and Obscenity in the Mails. 87 

inside was printed the name of some article of crockery to 
which the purchaser of the package was entitled. 

When the case was first before the Court of Appeals of 
Maryland, 73 Md. 527, it was held that this scheme was a gift 
enterprise and unlawful, but when the case was again appealed, 
the court held that the scheme did not involve the element 
of chance and hence, that the above cited act, so far as it re- 
lated to gift enterprises not involving chance, was invalid 
and Long was discharged. As the articles distributed to the 
purchasers of coffee were of different kinds and, presumably, 
of different values, this last ruling seems to be in conflict with 
a long line of decisions. The ruling is certainly not supported 
by the case of People vs. Gillson, 109 !N". Y. 389, upon which 
the court seemed to mainly rely. There the purchaser 
of two pounds of coffee had the privilege of choosing any ar- 
ticle of crockery or glass ware from a lot of such articles in 
plain view of the public. The court said: "A counter had 
upon it various articles of crockery all of which were in full 
view of the purchaser at the time he purchased the coffee in 
question. He was told that he could have any of the articles 
on the counter, to be picked out by himself, if he purchased 
two pounds of the coffee mentioned." The court held, and 
rightfully too, that the scheme was not a lottery. Nor is the 
Long case sustained by the Commonwealth vs. Emerson, 165 
Mass. 146. 

Sec. 75. There the construction of the Massachusetts 
Act of 1884, c. 277, was involved. That act provided that no 
person should sell, exchange or dispose of any property or offer 
or attempt to do so upon any representation, advertisement 
or inducement, that anything, other than what was specifically 
stated to be the subject of the sale or exchange, was to be de- 
livered or received or in any way connected with it as a part 
of the transaction. 

Defendant, a retailer of tobacco, displayed in his window 
a large number of photographs of distinguished or notorious 
men and women, with the advertisement that each purchaser 



88 Lotteries, Frauds and Obscenity in the Mails. 

of a piece of certain tobacco was entitled to one of these pho- 
tographs, he to make his own selection. 

The court, construing the words of' the statute, said: 
"They were not intended and do not purport to forbid a sale 
of two things at once, even if one of them is the principal ob- 
ject of desire and the other an additional inducement which 
turns the scale. But the aim of the statute is to prevent offers 
of bargains which appeal to the gambling instinct and induce 
people to buy what they do not want by the promise of a gift 
or prize, the precise nature of which is not known at the mo- 
ment of making the purchase. There was nothing of that sort 
in the present case. All that was sold was "specifically stated 
io be the subject of the sale" and we think it very plain that, 
if the offer of a single photograph with the tobacco would have 
been lawful, the offer of a choice out of a number is no less so, 
the buyer being free to make his choice before he takes the 
tobacco." 

But in the Long case each package of coffee had on it a 
slip, blank on the outside, but on the inside was printed the 
name of the article of crockery ware to which the purchaser 
was entitled. The purchaser did not have a choice of the ar- 
ticle he desired but it came to him by chance, and hence ac- 
cording to all the authorities the scheme was an enterprise sim- 
ilar to a lottery. 

Sec. 76. There is no question that a scheme similar to a 
lottery or so-called gift-concert, offering prizes dependent on 
lot or chance, includes bazaars, or church fairs, though held 
for the purpose of raising money for a charity, where the com- 
petitors pay a specified sum of money each, and then articles of 
unequal value are distributed among them by a raffle or draw- 
ing, every competitor getting something for his money. Such 
a scheme also includes the modern institution called a "fish 
pond," in which a quantity of articles of unequal value and 
all under cover are placed and the competitors, with a fishing 
rod and line and hook attacked, fish up articles, the value of 
which is of course unknown until taken out. 



Lotteries, Frauds and Obscenity in the Mails. 89 

Subdivision 11 of section 331 Postal Laws and Kegula- 
tions of 1893 declares that "The term 'lottery/ as used in this 
act, embraces all kinds of schemes, general or local, for the dis- 
tribution of prizes by lot or chance, such as gift exhibitions, 
enterprises, concerts, raffles, or the drawing of prizes in money 
or property at fairs. " 

It appears that a lottery scheme, conducted under the 
auspices of a church or charitable society, would be more rep- 
rehensible and pernicious in its consequences upon the com- 
petitors, than if operated by a professed gambler. It would 
be difficult indeed to estimate the pernicious effect of the draw- 
ing of a prize of value by a boy or girl or even by a person of 
mature years under the supervision of a Sunday School teacher 
or a minister of the Grospel. The winning of a prize by a 
party under such conditions would not only in the language 
of the Supreme Court of the United States in the Horner case 
"tend to promote a gambling spirit and a love of making gain 
through the chance of dice, cards, wheels, or other methods 
of settling a contingency," but also impress the winner with 
faith in the morality of "making gain" in that way; and this 
impression might be so strong as to shape his after life 
and character; no doubt many a confirmed gambler, whose 
life has ended in suicide or the penitentiary, could have dis- 
tinctly traced his love of making gain through "the chance of 
dice, cards, wheel or other method of settling a contingency" 
to a prize won at a church fair under the eye and sanction of 
his minister or religious teacher. 

A lottery scheme can no more be justified on the ground 
that its object is to raise money for religious or charitable pur- 
poses, than can theft for the same purposes be justified. 
Boyd. vs. State, 61 Ala. 177; Tuskaloosa Scientific and Art 
Association vs. State, 58 Ala. 54; State vs. Overton, 16 Nev. 
136; Governor's Alms House vs. Am. Art Union, 32 How. Pr. 
341, 7 1ST. Y. 228; People vs. Am. Art Union, 7 K Y. 240; 
People vs. Am. Art Union, 13 Barb. 577; 3 Selden, 235; 
Bennett vs. Am. Art Union, 5 Sandf. 614; Eolfe vs. Dolmar, 



90 Lotteries, Frauds and Obscenity in the Mails. 

7 Eobert, 80; Negley vsi. Devlin, 12 Abb. Pr. (N. S.) 210; 
Ex parte Blanchard, 9 Nev. 101. 

GIFT ENTERPRISES ; MISCELLANEOUS SCHEMES. 

Sec. 77. In Handle vs. State, 42 Texas, 580, the defend- 
ant and two others operated a scheme under the name of "The 
Galveston Gift Enterprise Association," which was licensed 
under the laws of Texas, to conduct a gift enterprise. The 
prizes were distributed by chance. The court held that the 
scheme was a lottery. Two experts testified that the enter- 
prise was not a lottery because each ticket holder received 
something in return for his money. Speaking of this evi- 
dence the court said: "The opinion of two experts that this 
was not a lottery can scarcely be expected to have any weight 
against the opinion of the most enlightened judges in the 
country, who have repeatedly held that the fact of each ticket 
holder being certain to receive something did not relieve it 
from the character of a lottery." 

In another place the court said: "The act to regu- 
late taxation, June 3, 1873, which levies an occupation 
tax upon gift enterprises, has no force or power to legalize this 
or any of its kindred offenses, whether the pretext be to dis- 
pose of books, money, jewelry, land or lots or any species of 
property, be it real or personal * * * neither will the 
object or pretense, that it is in aid of a church, a school, au 
orphan's home, or any other religious, educational or charita- 
ble object, improve its legal status. That it makes not the 
slightest difference whether it be styled a 'gift enterprise/ 
'book sale/ 'land distribution or art association/ each and all 
are lotteries when the element of chance is connected with or 
enters into the distribution of the prizes." 

Sec. 78. In Eubanks vs. The State, 3 Heisk, 688, the 
defendant sold prize candy publicly. The candy was put up 
in boxes and each box, which was sold for fifty cents, contained 
candies worth ten cents. Some of the boxes, besides the can- 
dies, had in them rings, silver half dollars, watches and jew- 



Lotteries, Frauds and Obscenity in the Mails. 91 

elry. Each contained candy and something else of value not 
known to either seller or purchaser. He was convicted for 
promoting the playing at a certain game of hazard and address 
denominated a gift enterprise and being convicted appealed; 
and the Supreme Court of Tennessee upheld the conviction. 

Sec. 78a. InDunn vs. The People, 40 111. 465, Dunn con- 
ducted a gift sale. He kept on his desk a box with envelopes 
standing sidewise in it. Each envelope contained some val- 
uable recipes and popular songs and also "a card descriptive of 
some article in an immense stock of over 250,000 pianos, 
watches, sewing machines, engravings, sets of jewelry, books 
etc., worth $1,500,000, all to be sold for one dollar each, with- 
out regard to value and not to be paid for until you know what 
you are to receive." A card might represent a grand piano 
or a finger ring but the purchaser of an envelope might buy 
the article represented on the card found in his envelope for 
one dollar or he might refuse to buy the article at all. The 
price of each envelope was twenty-five cents. It was urged 
that these envelopes, with their contents, were not lottery tick- 
ets, but the court held that they were. On this point the 
court said: "It is true, as alleged by counsel, that each envel- 
ope contained, besides the card, a number of songs and recipes 
and that the card or ticket representing an article of merchan- 
dise to be bought for one dollar confers simply a right to buy, 
which the holder can exercise or not at his option, and if he 
buys he does so with his eyes open and with the opportunity 
of knowing the value of what he purchases. This is true, but 
the element^ of chance lies, not in what the holder of the envel- 
ope may knowingly do with his card and dollar after he has 
purchased his envelope, but in the purchase of the envelope 
itself, which, it is represented to him by the advertisements, 
may contain a card or ticket that will give him the right to buy 
for one dollar an article worth hundreds of dollars, or may 
contain a card that will only give him the right to buy some- 
thing so valueless as not to be worth buying at any price. So 
far as men, who manage schemes of this character, can be sup- 
posed to give the credulous persons who deal with them any 



92 Lotteries } Frauds and Obscenity in the Mails. 

chance whatever of a return in value of their investment, the 
chance lies in the sale of the envelope. This, at least, is the 
chance offered. The plaintiff in error professes to the public 
as an inducement to purchase his envelopes, that twenty-five 
cents will buy one, whose contents may represent a cheap 
trinket or a grand piano, according to the fortune of the pur- 
chaser in buying and certainly the fact, that a dollar is to be 
paid in order to secure the further fruits of the transaction 
and that it may be consummated or not at the option of the 
purchaser does not make the transaction any less a lottery than 
if the dollar were not to be paid at all. * * * Neither 
would the character of the transaction be changed by assum- 
ing that the ticket in every envelope really represents some 
article of merchandise intrinsically worth the dollar which the 
holder will be obliged to pay. If every ticket, in an ordinary 
lottery, represented a prize of some value, yet if these prizes 
were of uneo.ual values, the scheme of distribution would still 
remain a lottery . 

"We are reminded by the counsel for the plaintiff in error 
that courts should not extend penal enactments by construc- 
tion. We acknowledge the obligation of the maxim, but we 
hold that the transaction proven against the plaintiff in error 
is within both the spirit and letter of the law. He may 
choose to call his business a 'gift sale,' but it is none the less 
a lottery, and we can not permit him to evade the penalties 
of the law by so transparent a device as a mere change of 
name." 

Sec. 78b. A scheme called a "gift enterprise" and so li- 
censed where small cards are sold with certain numbers on 
them and there is also a box kept containing a certain number 
of envelopes each containing a card with a number upon it 
the party buying a card being permittted to draw from the box 
an envelope and if the number on the card therein correspond 
with the number on the card purchased, the purchaser is to 
get ten times the amount of his investment, is a lottery. State 
vs. Bryant, 74 K C. 207. 



Lotteries, Frauds and Obscenity in the Mails. 93 

Sec. 79. A party sold at his store in New Orleans pack- 
ages of "Enterprise Tea" of the value of five cents each. In 
addition to the tea some of the packages contained tickets, en- 
titling the holder to some article or other, such, for example, 
as a silk handkerchief, a little lard, a turkey, a chicken, etc., 
and called prizes. Other packages contained nothing but the 
tea. The purchaser had the right to select a package from 
a lot on the counter. This was held to be a lottery by the 
Supreme Court of Louisiana, in State vs. Bonniel, 42 La. Ann. 
1110 and 10 L. E. A. 60. 

Sec. 80. A party sold candy in boxes at 50 cents each, 
representing each box to contain besides the candy a prize of 
money or jewelry, but each purchaser selected his box in ig- 
norance of its contents. Held that this was a device in the 
nature of a lottery. Holman vs. State, 2 Texas App. 610; 
Miller vs. Com., 13 Bush (Ky.) 731. 

The sale of packages of candy, in some of which coupons 
were placed, which were cashed at a counter on presentation, 
the drawing of such prize being announced by a gong, was 
held to be a lottery in Com. vs. Sheriff, 10 Phila. 203, though 
it was posted "no lottery." 

Sec. 81. In Eegina vs. Freeman, 18 Ontario Rep. 524, 
the defendant had on his shelves cans of tea, in one of which 
was a gold watch, in another a diamond ring, and in a third 
twenty dollars in money. The cans of tea were offered for one 
dollar each with the privilege of choosing any one can. He 
was convicted of operating a lottery scheme and on appeal to 
the Divisional Court the conviction was sustained. 

Sec. 82. A party issued tickets as follows: "The bearer 
is entitled to admission to a grand concert for the benefit of 

to be held in "Washington, D. C, on and to 

whatever gift may be awarded to its number. Tickets, $5.00 
each." Each ticket was numbered. The party advertised 
that the concert was to be given to raise money for the benefit 
of the Foundling Asylum of the Sisters of Charity of "New 
York and Sailors & Orphans' Home of Washington, D. C, 
and that the gifts to be awarded consisted of real estate, bonds 



94 Lotteries, Frauds and Obscenity in the Mails. 

and cash constituting 1003 gifts, valued at $260,000. This 
was held fco be a lottery in Negley vs. Devlin, 12 Abb. Pr. 
(N. S.) 210. 

Sec. 83. A firm placed in its window a locked box, with 
a glass front, containing $25 in bills, and advertised that all 
persons, buying goods in their store, and paying therefor 50 
cents or more, would be given a key, and one and only one key 
would be given out which would unlock the box, and that the 
person receiving the key, that would unlock the box, would be 
given the $25 in it. This was held a lottery in Davenport vs. 
City of Ottowa, by the Supreme Court of Kansas, 39 Pac. 
Eep. 708. 

The court said: "It is said that no element of chance ex- 
isted, because the right of the purchaser to obtain a prize was, 
in fact, absolutely determined the instant he received the key. 
If the key fitted the lock, the money was his from that instant. 
If it did not, it was not to be his. This contention is not 
sound, though specious. Neither buyer nor seller was sup- 
posed to know which was the true key to the box and the fact 
would only be actually determined when the trial was made 
at the time appointed to unlock the box. But even if we as- 
sume that the chance was determined when the sale was made, 
it would be equally a lottery, for the fortunate person would 
at once obtain a right to the prize, though he could not in fact 
get it until the time appointed. The unfortunate purchaser 
would at once receive his merchandise and his blank in the 
lottery. No sound distinction exists between the principle in- 
volved in this case and that in the case of State vs. Mercantile 
Ass'n, 45 Kansas, 351. The case of the State vs. Mumford, 
73 Mo. 647, is also directly in point. Prizes were offered for 
subscribers to j;he Kansas City Times, each subscriber receiv- 
ing a ticket entitling him to participate in a drawing of prizes 
and no extra charge above the ordinary subscription price be- 
ing made. The Supreme Court of Missouri held this a lottery 
and that subscribers to the newspaper bought at the same time 
and for the same consideration the newspaper and the ticket 
in the lottery. So, in this case, the purchaser for one undi- 



Lotteries, Frauds and Obscenity in the Mails. 95 

vided price bought merchandise and a ticket in the scheme, 
which was to determine who should have the prize. These 
views are also upheld in the cases of Hudelson vs. State, 94 
Ind. 426; U. S. vs. Zeisler, 30 Fed. E. 499; Bell vs. State, 5 
Sneed, 507, and Thomas vs. People, 59 111. 160." 

It was conceded in this case that the main purpose of the 
merchants was "to increase their legitimate business by this 
scheme and that the sale of the merchandise was not used 
merely as a cover for conducting a lottery." 

Sec. 84. In State vs. Clarke, 33 K H. 329, (decided in 
1856), it appeared that a party kept a store and sold book} 
with numbers on them. The defendant after the sale of a 
book would open a book and place a piece of zinc with a hole 
in it on one of its pages and then inform the purchaser what 
prize he was entitled to. Defendant insisted that this was not 
shown to be a lottery. The statute of New Hampshire at that 
time prohibited "anyone, under a penalty, from making or 
putting up a lottery or disposing of any estate, real or persona], 
by lottery." The court said: "The word 'lottery' is not u 
term of the law. * * * In construing the statute we 
must be guided chiefly by the meaning of the term as it is or- 
dinarily used in a popular sense and by reference to the mis- 
chief intended to be redressed. * * * The name given 
to the process and the form of the machinery used to accom- 
plish the object are not material, provided the substance of the 
transaction is a distribution or disposition of property by lot. 
In the interpretation of remedial statutes like this, the 'office 
of the judges is to make such construction as will suppress the 
mischief ancf advance the remedy and to suppress all evasions 
for the continuance of the mischief.' Magdelen College case, 
11 Co. 71, b. * * * From the evidence in this case, 
the jury were well warranted in finding that, according to 
some scheme upon which the defendants preferred to act, there 
was a correspondence between the numbers placed on the 
books purchased and the different articles proposed as gifts or 
prizes, by which, when the book was purchased, the defendants 
ascertained what gift or prize the purchaser was entitled to 



96 Lotteries, Frauds and Obscenity in the Mails. 

have according to their scheme. * * ' * It was objected 
that by the purchase of the book with a number that in some 
way designated the gift to which the purchaser was entitled, 
his gift was ascertained at once upon the purchase and did 
not depend on any subsequent drawing of lots, and that, 
therefore, the case does not fall within the meaning of the 
word 'lottery' as it is ordinarily used and is not within the 
statutes. But with the purchaser what prize he might obtain 
was a mere matter of lot or chance. The scheme involved 
substantially the same sort of gambling upon chances as in any 
other kind of lottery. It appealed to the same disposition for 
engaging in hazards and chances with the hope that luck and 
good fortune may give a great return for a small outlay and as. 
we think within the general meaning of the word lottery' 
and clearly within the mischief against which the statute is 
aimed." The court, after stating that asurrance had been 
given by the promoter that the presents should be awarded 
fairly and that each adventurer had received for his money a 
numbered receipt, inquired how presents of unequal value 
could be awarded fairly unless by some lot or chance and what 
could be the purpose of numbers, if all the numbers were to be 
favored alike. 

Sec. 85. In Bell vs. The State, 5 Sneed (Tenn.), 507, the 
defendant, Bell, sold books at the usual market price and with 
each book offered a prize, varying in value from $40 down, 
to be drawn on the purchase of each volume. The names of 
the prizes were written in a blank book and a sort of sliding 
scale was fitted over the names and so arranged that at the 
purchase of a book the scale was slid down a line and revealed 
the name of the prize the purchaser of the book was to get. 
The court said: "Gaming is an agreement between two or 
more to risk money on a contest or chance of any kind where 
one must be loser and the other gainer. Some games depend 
altogether upon skill, others upon chance and others of a mixed 
nature. Billiards is an example of the first, lotteries of the sec- 
ond and back gammon of the last. 2 Bou's. Law Die. 553. 
A lottery is a game of hazard in which small sums are ven- 



Lotteries, Frauds and Obscenity in the Mails. 97 

tured for the chance of obtaining greater. Now, in view of 
these definitions, what is the case before us ? Is it not a species 
of gambling called a lottery ? A small sum is ventured for the 
chance of a greater, one dollar or Hyq dollars, perhaps, for 
a book and the chance of a watch valued at forty or a set of 
instruments at two dollars, or a box of wafers worth ten cents. 
If the book is certain without hazard, the watch is not, that 
depends on chance. So all pay money, at least in part, for 
the chance of winning a prize of a greater or less value. Ac- 
cording to every correct idea of legal definition this must be 
gaming and all concerned are guilty of the offense. All these 
artifices to evade and cheat the law and entrap the unwary 
are but aggravations of the offense." 

Sec. 86. In Governors of Alms House vs. American Art 
Union, 7 N. Y. 228, the Art Union was authorized by the 
Legislature of New York in 1844. The Union charged $5 for 
membership. The funds raised were used to establish in New 
York a gallery of art for the exhibition of works of art to be 
kept open to visitors free of charge; each member was to get 
one or more fine engravings annually and a copy per month 
of a magazine published by the Union. Pictures of unequal 
value, but none worth less than $5, were purchased and at the 
end .of each year these were distributed among the members 
by lot. 

The Constitutions of the State of 1821 and 1846 provided 
that "no lottery shall hereafter be authorized in this State." 
The contention in this case was, that each member received 
the full value of the money he invested; that the object of the 
scheme was praiseworthy and for moral purposes and that the 
prizes awarded had no market value; that the prizes had not 
been designated at the time the money was paid; and that 
the State Constitution did not intend to prohibit such a 
scheme. But the court held otherwise, and declared the 
scheme a lottery and the act authorizing it unconstitutional. 

Sec. 87. In Hull vs. Kuggles et al., 56 N. Y. 424, the 
plaintiff sold and delivered to defendants 300 packages of 

7 



98 Lotteries, Frauds and Obscenity in the Mails. 

candy and sixty pieces of silver ware, for which defendants 
promised to pay plaintiff the sum of seventy dollars and the 
action was brought to recover that sum. The defendants de- 
fended on the ground that the packages of candy were so 
prepared as to make the scheme a lottery and, therefore, un- 
lawful. It was shown at the trial that the plaintiff so put 
up the packages of candy as that, in some of the packages, 
there were no tickets, while in others there were concealed 
tickets, on which was the name of some one of the articles of 
silver ware, to which the holders of the tickets were entitled 
on presentation to the vendor of the packages. The court said : 
"Section 38 of the Eevised Statutes (1 R. S. 668, Sec. 38), 
declares that every sale of any goods for the purpose of aiding 
in a lottery is void and of no effect. It is difficult to perceive 
how a sale of goods so packed and arranged as to enable the 
purchaser, without alteration or readjustment of them, to carr? 
out a scheme, which, when accomplished, is an unlawful 
lottery, and sold thus with knowledge, or with reasonable cause 
for belief, that the purchaser, by the disposal to the public 
of the goods thus arranged, intended to violate the Statutes 
against lotteries, is not a sale for the purpose of aiding in a 
lottery. It can not be otherwise. The sale of the plaintiff to 
the defendants was to aid in carrying on an unlawful lottery 
and was void." 

Sec. 88. The publisher of a newspaper advertised that 
anyone who subscribed for the paper for one year or who was 
indebted to the paper for subscription thereto and would pay 
up would receive a ticket in a drawing to take place on a day 
named. The tickets were to be placed in a covered box and 
the fifteenth ticket drawn out would be the prize ticket, 
entitling the holder of the ticket having the corresponding 
number on it to a sewing machine and the holders of the las: 
fifteen numbers taken from the box would each be entitled 
to a copy of the World Almanac. This was held in U. S. vs. 
Wallis, 58 Fed. Eep. 942, to be a lottery. Here it will be 
observed that those who were indebted for the paper could 
procure tickets by paying what they owed, and from this fact 



Lotteries, Frauds and Obscenity in the Mails. 99 

it would appear there was no consideration paid for the chance. 
It may be very well doubted whether the payment of a debt 
already contracted and due can be regarded as a valuable 
consideration and yet it may come and probably does come 
within the principle announced in the Horner case that the 
sale of a chance in a lottery constitutes a sufficient considera- 
tion to support a lottery scheme where the chance operates 
as an inducement to an adventurer to buy something else the 
promoter has to sell. The rule in regard to the element of 
consideration in a lottery scheme is broader than in ordinary 
contracts and business transactions, for in lotteries the less an 
adventurer pays and the more he gets, if he wins, the more 
apparent the wager becomes, the fundamental principle of 
gambling being to get something for nothing. 

Sec. 89. The defendant in State vs. Mumford, 73 Mo. 
E. 655 (39 Am. Reps. 532), being the business manager of a 
newspaper, advertised that four distributions of premiums 
would be made to the subscribers of the paper during the year 
1877, amounting to $20,000 personal property, consisting of 
pianos, books, guns, sewing machines and many other useful 
articles with the value placed opposite each and that to each 
subscriber a ticket would be given, which was good for all 
the distributions. The allotment of the prizes were super- 
intended by a committee selected by the subscribers and the 
allotments were made by drawing tags from two wheels, one 
representing the number of the ticket and the other the 
number of the prize. The defendant had nothing to do with 
the allotments except to furnish the paraphernalia for the dis- 
tribution and \o furnish and deliver the prizes to the sub- 
scribers. The subscribers paid no more for the paper and a 
ticket than the regular rate for the paper alone. The de- 
fendant insisted that this scheme was not a lottery because 
the newspaper was intrinsically worth the subscription price, 
which was not increased by reason of the scheme, but the court 
overruled this contention and held the defendant had been 
rightfully convicted of the offense of operating a lottery. On 
this point the court said : "The fact that the subscription of 

i L. of 0, 



100 Lotteries, Frauds and Obscenity in the Mails. 



he 



the Times was not increased does not alter the character of the 
scheme, inasmuch as the price paid entitled the subscriber 
to a ticket in the lottery as well as a copy of the paper." 

So far as the record shows the court- tacitly conceded 
that defendant was guilty of the offense though he did not 
personally allot the prizes, which was done by a committee 
appointed by the subscribers themselves. 

Sec. 90. Barclay v. Pearson et al. (1893), 2 Ch. 154, 
was a case where the defendant was a proprietor of a news- 
paper and carried on a competition as follows: He published 
in his paper a paragraph, omitting the last word. He printed 
also a coupon, with directions that any person, wishing to 
compete, should cut out the coupon, fill in the missing word 
and send it, with a postal order for one shilling, to the office 
of the paper. It was stated that the missing word was in the ' 
hands of a chartered accountant in a sealed envelope and that 
his statement would appear with the result of the competition 
in his paper, and the whole amount of money, received in 
entrance fees, would be divided equally amongst those com- 
petitors, who filled in the missing word correctly. Coupons 
to the number 474,574, with sums of money amounting in all 
to 23,628 pounds and 14 shillings were sent to defendant 
Pearson. In an action by the unsuccessful competitors against 
the proprietor of the paper, the accountant and the successful 
competitors, seeking administration of the money in the hands 
of the defendants, as trust funds, for the purpose of the com- 
petition and distribution among the persons entitled thereto. 
It was held: 1. That the competition was a lottery within 
the meaning of 42 Geo. 3, C. 119 and was illegal. 2. That, 
so far as the money in the hands of defendants was impressed 
with any trust, it was one arising out of an illegal transaction 
and the court would not render any assistance in its administra- 
tion and semble, 3. That notwithstanding the illegality of 
the competition, the competitors had a legal right, at all 
events, to the return of their contributions, provided they gave 
notice of their claim before the money had been distributed by 
defendant, Pearson. 



Lotteries, Frauds and Obscenity in the Mails. 101 

It was argued for plaintiff that there was no chance in the 
scheme and a case before Sir John Bridges was cited. In 
that case the missing word was not selected by the promoter 
but was drawn, after the entries were closed, from a number of 
other words, written on pieces of paper and placed in a bag and 
it was insisted that rendered the selection a mere chance. But 
Sterling, J., asked, "Is there not also in this case the element 
of chance? That must be so, unless the winning word is 
necessarily the word which is most appropriate to the sen- 
tence." 

The counsel answered: "In order to constitute a lottery 

there must be a pure chance, which is not the case here. If 

I the element of selection is present, then it is not a lottery. If 

| any power of reason or will is exercised upon the question of 

selection then the element of chance is gone and there is no 

| lottery." 

Sterling, J. "In this case the word is determined by the 
! arbitrary selection of the editor of the paper." 

Counsel replied: "If it were chosen after the competi- 

i tion, that might make a difference but here it is fixed upon by 

I the editor, previous to the competition, and this is no chance 

i and therefore no lottery. Skill and thought were required 

by the competitors in selecting the word." 

The counsel for the unsuccessful competitors argued : "It 
it said that the competition is not a lottery, because there must 
have been an exercise of will or mind in the selection of the 
. word ; but in order to prevent its being a lottery there must be 
an exercise o£the intelligence or skill. Mere volition is not 
enough. If it were, then there could never be lottery, for 
there must be an exercrise of will power in the mere choice of 
a ticket. The word is arbitrarily chosen by the editor. The 
guessing at the word is the event, upon which the competition 
is decided and that was pure chance and makes it a lottery. 
* * * There need not be a mechanical drawing of lots, or 
casting of dice to constitute a lottery. The fact that the word 
is chosen before the commencement of the competition is 
immaterial. Morris vs. Blackman, 2 H..& C. 912; Boddy 



102 Lotteries, Frauds and Obscenity in the Mails. 

vs. Stanley, 5 Ir. Jur. 10. The certainty of the event before 
the competition does not prevent its being a lottery. Accord- 
ing to the history of the Lottery Acts, the question does not 
depend upon the presence or absence of a mechanical lot; but 
what is aimed at is the staking of money upon a chance." 

The court (Sterling, J.), said: "It is not of the essence 
of the competition, that the word to which success attaches, 
or as it is called the 'correct word/ should be the most appropri- 
ate to fill the gap. In the present instance many words appear 
to me more appropriate than 'accountable' (the correct word in 
the scheme). ~No clue is given to the mode in which, among 
the many words more or less appropriate, that, to which suc- 
cess is attached, is actually chosen. I infer the selection is 
perfectly arbitrary or, in other words, that it is made by chance 
and is none the less so, because the range of selection, though 
wide, is not unlimited. * * * I think the distribution 
takes place by chance. In coming to that conclusion I have 
the guidance of a decision (which doubtless is not binding on 
me but which appears perfectly correct), of the present learned 
and experienced magistrate at Bow Street, Sir John Bridges. 
He had to consider the case of a competition conducted gen- 
erally on a similar mode to that now in question, but with 
the following variations in detail: The word to which suc- 
cess attached was not fixed until after all the coupons had 
been sent in and was then chosen by selecting from a bag one 
of twenty or thirty pieces, on which had been written words 
which were more or less appropriate solutions. The magis- 
trate held that it was a scheme for the distribution of prizes 
by chance and consequently a lottery. In giving judgment he 
is stated to have said (according to the report, with which I 
have been furnished) : Tf the competition is decided by skill 
and judgment and not by chance, then it is not a lottery. If 
competitors were asked to supply the word (by which I 
understand him to mean the most appropriate word) and not 
a word — it makes a difference. The defendants do not pretend 
to say that they call for the selection of the most fitting word 
with which to complete the sentence. The selection of the 



Lotteries, Frauds and Obscenity in the Mails. 103 

word must be entirely a matter of chance. On that ground 
the case comes within the meaning of the Lottery Acts.' I 
agree with these observations and think them applicable to 
the present case. Neither the circumstance that the word is 
determined before the competition begins, nor the circum- 
stance that the mode of selection is unknown, appears to me 
to give rise to any real difference. It was urged that the 
chance or lot contemplated by the statute, 42 Geo. 3 C. 119, 
must be ejusdem generis with those enumerated, viz.; dice, 
lots, cards, balls, numbers or figures. I think the use of 
a physical lot is form, not substance ; the arbitrary, unfettered 
choice of the editor of Pearson's Weekly does not substantially 
differ from the selection by means of the bag mode in the 
competition which gave rise to the decision in Bow Street and 
the lottery was admitted to fall within the terms of the Act." 

Sec. 91. The following gift enterprises have been held 
by the Assistant Attorney-General for the Postomce Depart- 
ment to be lottery schemes. 

A party offered boxes of medicine for sale and stated that 
in every twenty-fifth box there was a five dollar gold piece. 

In each month of the year 800 five cent pieces were put 
in that number of packages of tobacco; 250 ten cent pieces 
in that number of packages; 100 twenty-five cent pieces in that' 
number of packages, and so on to the end of the list, twelve 
of the packages containing $25 each. The purchaser of a 
package became the owner of the money in it. 

A publisher of a newspaper advertised that a certain rail- 
road company^ would daily give $2.50 each for certain num- 
bers of the paper forwarded to it, all the papers issued being 
numbered. 

A publisher gave tickets to the patrons of his paper, the 
tickets being numbered in the order the subscriptions were 
made and advertised that prizes would be awarded to the Hyq 
hundredth, one thousandth and ten thousandth subscriber. 

The vendors of typewriters gave tickets to purchasers, 
which were numbered in the order the sales were made and the 
fiftieth and five hundredth purchasers were to receive prizes. 



104 Lotteries, Frauds and Obscenity in the Mails. 

A United States Treasury note was deposited with a State 
Treasurer, the figures of the number of the note were given 
but not in the order they appeared on the note and a prize 
was offered to the party guessing nearest the number on the 
note. 

A party offered a prize to the person who would guess 
nearest to the time a certain watch would stop running. 

A party offered to present a bicycle to the person guessing 
nearest to the factory number of the wheel. 

A five hundred dollar bill was placed in a safe and a prize 
was offered to the party who would guess the number on the 
bill. 

A prize was offered to the person who would give the 
nearest correct answer to the question: "What distance will 
a certain pony, harnessed to a wagon, be driven on the 4th day 
of July next, and how long will it take to cover such distance V x 

The Assistant Attorney-General for the Postoffice De- 
partment also held that prizes offered to parties giving the 
correct words in missing word contests depended on chance, 
unless the sentences were taken from the published works of 
well known authors. As a practical question, however, 
taking the sentences from well known works did not in 
fact eliminate the chance element, for 999 out of every 1,000 
competitors did not look for the sentences in such works 
but simply guessed what the missing words were and in that 
case their guesses depended as much on chance as if they had 
been without the means of unerringly ascertaining the correct 
words. And a scheme was held not to be a lottery when it was 
stated the missing word in the sentence could be found in the 
advertisement itself. But even then the guess would depend 
on chance if more than one word that would complete the 
sense could be found in the advertisement. In that case the 
guesser could not know which word to select. 

But in the guessing contests of this character, however, 
the competitors, as a rule, are given the privilege of making 
as many guesses as they please and hence they give all possible 
words to complete the sense of the sentence and thus remove 



Lotteries, Frauds and Obscenity in the Mails. 105 

the chance element and in such contingency, the promoters in 
order to avoid giving prizes to all the successful competitors 
notify the public that if two or more give the correct word 
the prize will be divided among them; and then the schemes 
become lotteries because the amount of the prizes is made to 
depend on chance. 

Sec. 92. Merchants and other business men sometimes 
put up packages of merchandise for sale, in each of which a 
letter of the alphabet or one of the nine digits is placed, so as 
to be hidden from view and offer prizes to purchasers who will 
return to the vendors enough of the letters to spell a word or 
group of words or a certain number of the nine digits. Accord- 
ing to the scheme a given letter or number might be found in 
only a few packages and perhaps in one package only. This 
was held to be a lottery scheme by the Postoffice Department 
on the ground that one purchaser might have to buy thou- 
sands of packages to get the proper letters or numbers, while 
others might get them by buying the number of packages, 
corresponding with the required number of letters or numbers 
and still others might not draw all the letters or numbers at 
all. In fact in one case the Postoffice Inspector reported that 
a certain promoter of a scheme of this character intentionally 
failed to sell the packages containing one of the required 
letters so that it was impossible for the purchasers to comply 
with the conditions. 

GIFT CONCERTS ; MISCELLANEOUS SCHEMES. 

Sec. ST3. In State vs. Shorts and Tinsley, 3 Vroom, 
(32 K J. L.), 398, decided in 1868, the defendants 
exhibited a panorama. Each person at the door of the 
show got a ticket with a number upon it. At the close 
of the exhibition one of the defendants called at will 
any number and the person holding the corresponding 
ticket presented himself upon the stage, when, if the exhibitor 
liked his appearance, he presented him with one of the eight 
hundred articles advertised as gifts. It was, also, one of the 
terms of the project that at the option of the defendants a 



106 Lotteries, Frauds and Obscenity in the Mails. 

distribution of presents might be dispensed with. The de- 
fendants insisted that the transaction was not a lottery on 
account of the presence in it of the element of free will on the 
part of the exhibitor with regard to the distribution of 
presents. The court, in reply to this contention, said: "But 
this line of argument is far too subtle to be sound. Taking a 
practical view of the thing, its real nature can not be mis- 
understood. It is clearly a lottery if tested by any of the 
ordinary definitions of that term. 'A lottery/ says Johnson, 
'is a game of chance; a distribution of prizes by chance.' * * 

"In fact, it may be said with truth that the winner in this 
particular lottery has had a series of strokes of good fortune; 
for he has found by accident the projector in the propitious 
mood; he has drawn the favored number; and he has not been 
rejected on account of his personal appearance — circumstances 
which look like the results of mere casualty, for it is not 
pretended that the projector, either in the matter of volition as 
to the giving of presents or of approbation as to the recipients 
of them, founds his action on any settled rules of conduct 
which would appear reasonable to himself or to others. My 
conclusion is, that this is a game of chance and, consequently, 
a lottery and none the less so because of those reservations of 
control over it by the adroit use of which the getters-up of the 
game were sure, in all substantial respects, to be the winners. 
It is an affair conspicuously within the mischief at which the 
Statute is leveled. The particular traits of it above noticed 
appear like devices to evade the law. But the law regards not 
mere semblance, but the substance of things, and, conse- 
quently, these devices, however ingenious, can not be success- 
ful." 

Sec. 95. In Queen vs. Parker, 9 Manitoba E. 203, the 
defendant's mode of operation was as follows: "He held a 
concert in the Market Square, Winnipeg, and after some music 
he sold boxes of what he called "Parker's Pacific Pens." 
Before the sale he had placed in an empty box 100 envelopes 
with five dollars in each, 5 envelopes with ten dollars in each 
and one envelope with fifty dollars in it, making altogether 



Lotteries, Frauds and Obscenity in the Mails. 107 

$250 in 116 envelopes. He also placed in the box 116 en- 
velopes containing only blank pieces of paper. Every person 
paying one dollar for a box of pens was entitled to draw an 
envelope and a person paying five dollars for a box of pens 
could draw eight envelopes; but he would not take more than 
five dollars from any one person, in order, as he said, to protect 
himself, because if one man took 232 envelopes he would be 
out $18 besides the 232 boxes of pens. 

If the envelope, containing fifty dollars, was drawn before 
two-thirds of the pens were sold he would put in the box 
another envelope containing fifty dollars and fifty envelopes 
with blank papers. He said he did not sell the envelopes. 
He was convicted for a violation of the Manitoba Statute 
which prohibited the selling or offering for sale of "any lot, 
card, ticket or other means or device for advancing, lending, 
selling or otherwise disposing of any property real or personal 
by lots, tickets or any mode of chance whatsoever," and on 
appeal to the Court of Queen's Bench of Manitoba the con- 
viction was sustained. The court quoted from Taylor vs. 
Smetton, 11 Q. B. D. 207, as follows: a In making his pur- 
chase he (the purchaser) exercised no choice; what he got 
he got without the least option or action of his own will but as 
the result of mere chance or an accident." 

Sec. 96. In Taylor vs. Smetton (1883), 11 Q. B. D. 207, 
the appellant erected a tent, in which he sold packets, each 
containing a pound of tea, for 2 shillings 6 pence a packet. In 
each packet was a coupon, entitling the purchaser to a prize 
and this was* publicly stated by the appellant before the sale 
but the purchasers did not know, until after the sale, what 
prizes they were entitled to, the prizes ranging in character 
and value. The tea was good and worth the money paid. 
Held that this was a lottery within the meaning of 42 Geo. 
3 C. 119, S. 2. The court said that the scheme was adopted 
by appellant, no doubt, "with a view to induce purchasers to 
realize a profit to himself ; and though it was admitted by the 
respondent that the tea was good and worth all the money, 
it is impossible to suppose that the aggregate prices, charged 



108 Lotteries, Frauds and Obscenity in the Mails. 

and obtained for the packages, did not include the aggregate 
prices of the tea and the prizes. !N"or can it be doubted that in 
buying the package the purchaser treated it as a purchase of 
the tea and coupon, whatever its value might turn out to be." 
The cases of Morris vs. Blackman, 2 H. and C. 912 and Eeg. 
vs. Harris, 10 Cox, C. C. 352 were cited as strongly confirma- 
tory of the views expressed by the court. 

Sec. 97. In Morris vs. Blackman, 2 H. and C. 912, J. P. 
199, an attempt was made to evade the law by setting up a 
lottery under the guise of distributing presents gratuitously and 
capriciously among the audience. Morris kept watches, pieces 
of plate and other articles on exhibition in his window with the 
placard: a These presents, with others, will be given away 
by W. Morris at the conclusion of his entertainment at J$. 
Rooms, Brighton, to-night and every evening during the 
week." He sold tickets and the purchasers received a copy of 
the programme, in which it was stated that "at the conclusion 
of the entertainment Mr. Morris will distribute among his 
audience a shower of gold and silver treasure on a scale with- 
out parallel; besides a shower of smaller presents, which will be 
divided among the audience and given away." 

When the entertainment was concluded a quantity of 
these presents were placed on a table and Morris then took the 
articles, one at a time, and awarded them to the occupiers of 
seats, having certain numbers. The court held that this was 
a mere contrivance to conceal what was really a game or lottery 
within 42 Geo. Ill, C. 119. Pollock, C. B., used this 
language : "I have no doubt that not one of the audience had 
the least notion that the proprietor was to give the articles to 
any person he pleased; but that every one thought he had a 
chance of winning." 

This language seems to imply that the Chief Baron 
thought the articles that were awarded to the occupiers of 
certain seats had been previously determined by some kind of a 
drawing and if his decision can be construed to mean that if 
the proprietor gave "the articles to any person he pleased" 



Lotteries, Frauds and Obscenity in the Mails. 109 

the transaction did not have in it the element of chance, it 
can not be sustained by the weight of authority. 

It was distinctly held in the late case of Barclay vs. 
Pearson, 2 Ch. D. 154, that the arbitrary selection of a word 
by the promoter in a missing word contest was equivalent to 
selection by lot and the same principle is asserted in many of 
the other cases cited in this work. 

Sec. 98. In Thomas vs. The People, 59 111. 160, Thomas 
sold tickets in this form: 

•'Chicago Industrial College and Home Festival. 

This ticket is a receipt for Five Dollars in payment for 
and delivery of a Copy of a Steel Plate Engraving, and ad- 
mission to our Concerts and Lectures for which it is sold. 7 ' 

At the time of the delivery of this ticket a hand-bill was 
given the purchaser entitled "Grand National Festival to erect, 
in the City of Chicago, an Industrial College and Home for 
Unfortunate Females" and it stated that the promoter was to 
give a series of musical es, receptions and a course of lectures in 
Chicago, and was at the close thereof and after the sale of 
200,000 copies of the steel plate engravings to distribute to 
the purchasers of engravings, "in a just and legal manner," 
$200,000 in presents. The court held this to be a lottery, 
saying: "The term 'present' though literally it means a gift, 
yet, in the relation and in the sense in which it is used, 
evidently meant a prize. It was offered as the reward of con- 
test to the p%irchasers. It was somthing to be won. * * * 
Here there was a scheme for the distribution of prizes. * * 
"Even if the tickets to the concerts and lectures and an 
engraving were intrinsically worth $5, the scheme would still 
be a lottery. The hand bill advertisement, delivered with 
each ticket held out an inducement to purchase. Each person 
who invested $5 became entitled to a chance of $50,000 in 
glittering gold or $25,000 in green backs, or a splendid res- 
idence in Chicago or in Brooklyn, 1ST. Y. The purchasers 
were thus incited to rivalry." 



110 Lotteries, Frauds and Obscenity in the Mails. 

The law, construed in this case, prohibited the vending of 
lottery tickets. 

OFFERING A PRIZE TO THE FIRST SUCCESSFUL COMPETITOR, 
A LOTTERY SCHEME. 

Sec. 99. Here again, the promoters make their schemes 
so alluring and so easy of solution, that all classes are tempted 
to enter the contests. In a case, that was brought to the 
attention of the Postoffice Department, it was discovered by a 
Postoffice Inspector that a party in Washington City adver- 
tised that he would, on the receipt of thirty cents, forward, 
by mail, several packages of flower seeds, and would give i\ 
piano to the party who would send to him the first solution of 
a face puzzle; that he had advertised the scheme one week 
in Virginia, the next week in Georgia, and the next week in 
Pennsylvania, and that he had received 2,800 answers and 
every one of them was correct, the puzzle being so simple, 
even a child could solve it. Notwithstanding he knew the 
prize had been taken when the first answer was received, he 
inserted new advertisements in different sections of the 
country, offering the same old prize. This was held to be a 
fraud, as well as a lottery. 

At one time, the Department allowed schemes of this 
character to be advertised through the mails, upon the sup- 
position that the prize would go to the party who was the most 
energetic and intelligent; in other words that men by their will 
and forethought could control the result. The promoters, at 
first, simply advertised that the prizes would be awarded to the 
first successful competitors, without prescribing any rule by- 
which the first could be determined. It was soon found that 
this would not do. It was suggested that the receipt of the 
answer at the^ office of the promoter be taken to ascertain 
which was first. The answer was that if two or more should 
be received in the same mail and at the same time, there 
would be no way to award the prize among these except by lot. 
Then the promoters advertised that in order to determine 
who was first, the post-mark of mailing on their letters, trans- 
mitting their solutions, should be resorted to. For awhile 



Lotteries, Frauds and Obscenity in the Mails. Ill 

the Department thought this would eliminate the chance ele- . 
ment from the schemes and many of them were advertised 
through the mails. It was soon demonstrated, however, by 
experience and experiments, that this would not do and the 
Department came to the conclusion that a contestant, in one 
of these schemes, could not know, or determine, or control 
the award of the prize by his reason, foresight, sagacity, or 
design. It was found that letters, containing the solutions, 
had the same post-mark of mailing in many cases, and hence 
the mark did not indicate which was first. 

The following may be mentioned among the uncertain- 
ties inherent in this plan of awarding prizes, which render it 
impossible for a party to determine the result by his energy, 
sagacity or design, viz. : 1. The offer of the prize may not, 
and in nine times out of ten does not, reach all the contestants 
at the same time. A prize is offered in an advertisement in a 
Washington paper. The paper is delivered to city subscribers 
in an hour or two after issue, but it does not reach a California 
subscriber for six or seven days, and between these extremes, 
the time it reaches subscribers varies, no two places being 
precisely aiike as to postal facilities, to say nothing about the 
residences of subscribers in their proximity to the postoffice. 

2. The post-marking of letters varies to such a degree 
in the different postofnces in the country that it can not be 
relied on to determine who answers a question first, or even 
who deposits a letter in the office first. At first, second and 
third-class offices (and at fourth-class offices where the salary 
is more than $500), the post-mark shows the day and hour of 
the next outgoing mail. That is to say, the letters may be 
stamped "10 a. m.." when the mark is actually put there at 
7 a. m., because 10 a. m., is the time the mail leaves the office. 
At fourth-class offices where the salary of the postmaster is 
less than $500, the post-mark is not required to show the hour 
of mailing, but only the day; and, of course, at offices where 
there are weekly or semi-weekly mails the post-mark is 
changed weekly or semi-weekly, as the c&se may be, in order to 
show simply the day of mailing. Now suppose A, B, C and 



112 Lotteries, Frauds and Obscenity in the Mails. 

D deposit letters in four different offices at 7 a. m., April 27, 
1895. A puts his letter in the office at New York City, and 
it is post-marked 7:30 a. m. ; B puts his in the Washington 
office, and it is post-marked 8:30 a. m. ; C puts his in a fourth- 
class office where the salary is less than $500, and it is post- 
marked April 27, 1895, without the hour at all; C puts his in 
an office where there is only a weekly mail, which leaves on 
Tuesday, and his is postmarked "May 1, 1895;" or, to put a 
stronger case, suppose D deposits his letter in a postoffice which 
has but a weekly mail, leaving every Saturday, and the letter 
is deposited on Monday; and A deposits his letter in an office, 
having a daily mail, on Friday, after D's letter was posted, 
then D's letter would be post-marked Saturday and A's Friday, 
and thus these marks would show that A was first, though, in 
fact, D was ahead of him by several days. This contingency 
may be illustrated in an infinite variety of ways, by which it 
will manifestly appear that the post-mark will not determine 
which is first in time, in fact. 

But aside from these elements of chance, which 
are present in schemes of this character, the temp- 
tation to fraudulent practices is so great, that most 
of the promoters give way to it. Ordinarily the parties, offer- 
ing the prizes, are utterly irresponsible and in the most of the 
cases no prize is awarded at all, or if it be awarded, it goes to 
some one, who is on the ground floor and has his answer in 
before the scheme reaches the public, or as in the instance 
given above, the promoter continues to insert new advertise- 
ments offering the same old prize, after he knows it has been 
already taken many times over. As soon as all these phases 
of this plan of doing business were presented to the Depart- 
ment, the promoters of the schemes were denied the use of the 
mail facilities of the United States; and it is hoped they will, 
in time, be stamped out of existence, for they not only appeal 
to the gambling spirit of the people and beget a love of obtain- 
ing something for nothing but they are also unquestionably, 
in most cases, fraudulent in design and in practice and for that 
reason are more pernicious than an avowed lottery, like the 



Lotteries, Frauds and Obscenity in the Mails. 113 

Louisiana concern, in which, no doubt, the prizes offered were 
awarded in fact, and awarded in an honest way. 

Lottery Schemes Where the Amount of the Prizes ds- 
pends on Chance. 

Sec. 100. The chance element may be present in a lot- 
tery scheme, though the event, upon the happening of which 
the prize is to be awarded, is not, in the least, doubtful. This 
element is present, when the amount the winners may receive 
is dependent on chance. 

The promoters of lotteries and gift enterprises always 
devise their schemes, so as to take no risk themselves but to 
compel the adventurers to assume all the risks. They some- 
times do this by adopting a scheme in which there can be, or 
at least there are likely to be, no more than a fixed number of 
winners, as in all regular lotteries, and hence the promoters 
know, in advance, the maximum amount they will be required 
to pay. The scheme may be such, however, that the number of 
winners is entirely indefinite and in that case the promoters 
add conditions, that shift the chances of this lack of certainty 
from themselves to the adventurers. This is usually done in 
one of two ways : First, by providing that the first one, meet- 
ing the condition, on which the prize is offered, shall re- 
ceive the prize or second, by providing that if more than one 
comply with the conditions the prize, offered, shall be divided 
among them. The schemes, in which these methods are 
adopted, probably open a wider field for fraud and give less 
satisfaction to*" the adventurers, both losers and winners, than 
any others, because in one case the promoters continue their 
advertisements and continue to receive the people's money 
long after they, (the promoters), know the prizes have been 
taken and in the other case the successful adventurers hope for 
a large prize, when by the process of division among them, 
they get a mere pittance. 

In a case brought to the attention of the Postoffice De- 
partment a party, in connection with the sale of a patent 



114 Lotteries, Frauds and Obscenity in the Mails. 

medicine, offered a prize of $800 to the person, who would cor- 
rectly fill up twelve skeleton words and if more than one 
filled them all, the prize would be divided between them. 
The Department permitted this scheme to be run through 
the mails, as an experiment, and at the end of the time, it was 
found that so many had met the conditions in full, that the 
competitors received only seven cents a piece and that sum 
was paid by the checks of the promoter on a bank in Washing- 
ton City, so that to the competitors living outside of that City 
the prize was entirely valueless. Complaints by the hun- 
dreds, charging fraud, poured into the Department and after 
that, schemes in which the prize was to be divided among the 1 
successful competitors, if there should be more than one, were 
held to be not only lotteries but frauds as well. 

Where these methods are adopted the conditions of win- 
ning are purposely made so simple as to entice the public and 
induce thousands to enter the lists. 

The writer lately saw an advertisement of a scheme, 
which, for simplicity and facility of solution, surpassed any- 
thing that ever came under his observation. The party offered 
a prize of $100 to the person, who would correctly count the 
dots, displayed in the advertisement in such a way and to 
such a number as to make it simply a matter of counting and 
nothing more, and it was added that if more than one correctly 
counted the dots the prize should be equally divided among 
them. All, old and young, who can count a hundred, will 
be attracted by the simplicity of this scheme and the 
promoter will, no doubt, reap a rich harvest; while his dupes 
will be filled with chagrin and disgust when the returns come 
in and they find, by the process of division, they will not 
get enough to pay the postage on their letters transmitting 
their solutions, much less repay them for the sums they were 
required to remit, in order to have the privilege of entering 
the contest. That such enterprises are lottery schemes, there 
can be no doubt, upon reason and authority. 

Sec. 101. In Tollett, App. vs. Thomas, Res., L. E., 6 
Q. B. 514, the appellants were convicted in the trial court 



Lotteries, Frauds and Obscenity in the Mails. 115 

under 31 and 32 Vict, C, 52 S. 3, which provided that "any 
person playing or betting in a public place with any table or 
instrument of gaming at any game of chance should be liable 
to be convicted as a rogue and vagabond. From the evidence, 
it appeared appellants were the proprietors of a machine, 
called a "piri-mutual." The machine had on it numbers, 
beside each of which were three holes and behind these holes 
were figures which could be made to shift on the turning- of a 
key, so that any number from to 999 would be exhibited 
behind these holes. On top of the machine was the word, 
"total," and beside it were holes, in which could be exhibited 
in a similar manner figures shifting on the turn key. This 
machine was taken to a race course and each number was 
made to designate a particular horse. Any one desiring to bet 
on a particular horse deposited with appellants half a crown, 
and received a ticket appropriated to the horse ; and appel- 
lants, by a turn of the key, altered the figures increasing the 
sum indicated along the side of that number by one ; and the 
same turn of the key increased the figures beside "total" by 
one. When the race was run the holders of the tickets with 
the number of the winning horse had divided among them 
the amount of the half crowns deposited, less 10 per cent which 
the appellants retained as proprietors of the machine. 

On appeal to the Court of Queen's Bench, this scheme 
was held to come within the act. Chief Justice Cockburn, 
delivering the opinion of the court, said: "Thus, with in- 
genuity worthy to be employed in a better cause, it was con- 
trived that each person who was induced to bet might see 
at a glance what was the amount of the odds offered, if he 
bet on a particular horse; but (and this is material to be 
observed) the state of the odds was liable to be changed before 
the race was run. 

To illustrate what is meant, let us suppose that at some 
particular time the figures opposite "total" indicated 99 half- 
crowns had been deposited, and the figure number 1 showed 
that for some reason or other no ticket had been taken out for 
that horse. Any one, seeing and understanding this, would 



116 Lotteries, Frauds and Obscenity in the Mails. 

know that if he deposited his half-crown and took a ticket on 
No. 1, thns swelling the total to 100, he would, if things 
remained unaltered till the race was run, and the horse, 
designated by No. 1, won the race, as holder of his ticket, 
receive 90 half-crowns. But he would also know the odds 
were liable to be altered; for example, if 100 persons sub- 
sequently deposited half-crowns, so as to swell the total to 200 
and none took tickets on No. 1, he would, in the event of No. 1 
winning, receive 180 half-crowns; but if 19 of those new 
depositors took tickets on No. 1, he would, in the event of No. 
1 winning, only receive 9 half-crowns; for the total would have 
to be divided between the holders of No. 1 tickets, by the 
supposition, now 20. The person, therefore, who, by means 
of the machine, is induced to part with his half-crown, does 
so on speculation, his chance of remuneration depending on 
two events; one, namely, whether his horse wins, determining 
whether he shall get back anything; the other, namely, how 
many other gamblers shall have deposited their half-crowns, 
and on what tickets, determining how much he shall receive in 
the event of his winning. Over neither event could he by 
any skill or efforts of his own exercise any control." The 
learned Chief Justice, after determining that the machine 
was an instrument "of wagering or gaming at any game of 
chance," continued: "The second question is whether the 
wagering carried on is wagering on a game of chance. It was 
urged in the argument that the betting here, being on the event 
of a horse race, it could not be considered as wagering on a 
game of chance, a horse race not properly coming within 
such definition. * * * The winning of the horse betted upon 
is of course the primary condition of the wager being won; 
but whether the winning of the wager shall be productive of 
any profit to the winner, and more especially what the amount 
of that profit shall be, depends on the state of the betting with 
reference to the number of bets laid on or against the winning 
horse — a state of things fluctuating from one minute to an- 
other throughout the duration of the betting. Noiv this being 
something wholly independent of the issue of the race, as well 



Lotteries, Frauds and Obscenity in the Mails. 117 

as of the will and judgment of the winner, depending as it 
does on the will or caprice of other persons betting, is a matter 
obviously of uncertainty and chance to the individual better, 
more especially in the earlier stages of the betting. There 
being, then, this element of chance in the transaction among 
the parties betting, we think it may properly be termed, as 
amongst them, a game of chance.' 7 

Sec. 102. In State vs. Lovell, 39 1ST. J. L. 458, the de- 
fendant was charged with operating a lottery for money and 
selling a lottery ticket therein. He was engaged in the City 
of Hoboken, New Jersey, in the business commonly known 
as pool-selling and of disposing of pools, in 1877, on the 
Jerome Park horse races, in the State of ISFew York. The 
disposition of pools consisted of three methods: 

1st. Those known as auction pools. 

2nd. Those known as French pools. 

3d. Those known as combination pools. 

The auction, French and combination pools were iden- 
tical in principle, though differing in method. In all the poota 
the profits to the pool-sellers consisted in the commissions and 
all moneys invested in pools were left with them until the 
races were over. In the auction pool the amount the winner 
received depended upon how much others bet against him 
and in the French pool and combination pool, the amount won 
depended on how many others may have bet against the win- 
ner and on how many others may have bet as he did. 

It was not disputed that all the elements of a lottery in- 
hered in this scheme, except that of chance, but it was insisted 
on behalf of defendant that whether the person, hazarding the 
small sum, was to receive a larger one or not, depended not 
upon chance, but upon his own good or bad judgment in 
selecting the horse on which he bet. 

The Supreme Court of "New Jersey, after deciding that 
a horse race depended on chance so far as the bettors were 
concerned, added: "There is, however, aside from the result 
of the race, another element of chance in these games, which is 
clearly pointed out in Tollett vs. Thomas (L. E., 6 Q. B„ 514), 



118 Lotteries, Frauds and Obscenity in the Mails. 

and that is the element which determines what the winner k 
to gain. That element in the 'auction poo? depends upon 
how mnch others may bet against him, and in the French pool 
and combination pool upon how many others may bet against 
him and how many others may bet as he does, ^one of the 
bettors save the last one can possibly learn these matters. I 
need not repeat what is said in the case cited as to these 
ingredients making the transaction a game of chance. I con- 
clude, therefore, that the facts found contain every essential 
of a lottery, and that the business in which defendant was 
engaged is plainly within the animadversions of the court in 
Den ex Dem. Wooden vs.Shotwell (4 Zab.789),as engendering 
that improvident spirit of gambling which the prospect of 
adventurous gain usually excites, and having a direct tendency 
to produce those pernicious mischiefs in a community which 
the act for the suppression of lotteries was intended to pre- 
vent." 

The case of Tollett vs. Thomas and State vs. Lovell have 
never been criticized by the courts or text writers, but have 
been cited with approval in many cases and by many authors, 
and it may be regarded as settled that where the amount of the 
prizes to be awarded depends on chance and the other essential 
elements of a lottery are present the scheme is a lottery or 
similar enterprise. 

MYSTERY STORY CONTESTS. 

Sec. 103. A short time since it became quite common 
for publishers of magazines and newspapers to offer large 
prizes, in one case aggregating $30,000, to their readers who 
would most accurately give the denouement of the characters 
and plot of a serial story of fiction. The competitors were given 
till all but the- last chapter of the story was published to fur- 
nish their answers or guesses. The reader, who gave the correct 
ending of all the characters and plot, received a capital prize 
while others received prizes in proportion to the correctness of 
their answers. The Postoffice Department has not hitherto 
definitely determined whether these contests amounted to lot- 



Lotteries, Frauds and Obscenity in the Mails. 119 

tery schemes or not but in a tentative way simply tolerated 
them, in their relation to the mails. 

The operators of these schemes contended that a reader., 
after a deep and thoughful study of the story, ought to see and 
by the exercise of judgment and reason could see the end from 
the beginning, but this was found not to be true, because the 
most thoughtful readers, while they could tell how they 
thought the story ought to end, felt that in their endeavors 
to state the outcome given by the author, any answer they 
might make would be the merest guess which was as likely to 
be wrong as right. They would be conscious of being in a 
field where all depended on chance or luck. 

When these schemes are critically examined they appear 
clearly to come within the lottery Act of Congress upon 
principle and authority. If the contestants are required id 
determine how the story will end as to one character where 
there could be several appropriate endings, it would seem 
there would be as much chance in naming the ending the 
author had adopted as there was in the case of Barclay vs. 
Pearson, 2 Ch. 154, in guessing the word the publisher of the 
paper had selected in that case as the correct word to fill 
the blank in the sentence he gave. No reader could possibly 
know the ending the author adopts even if the most appro- 
priate ending be required and the chance element would still 
be present for it would simply be a matter of taste as to which 
outcome a party would choose; and besides that the stories 
were called a mystery stories" and the authors usually por- 
trayed unnatural characters, who did unheard of things. But 
in these contests the characters and plots were so numerous 
that it was impossible, except by mere chance, to give the 
correct outcome of all of them. One publisher offered eight 
hundred prizes of different values which he proposed to award 
to the contestants, according to the degree of correctness of 
their answers as to all the characters and plots. 

While the publishers who first inaugurated these contests 
reaped rich rewards, it is believed now that they have run their 
course and have been abandoned. 



120 Lotteries, Frauds and Obscenity in the Mails. 



WORD CONTESTS. 

Sec. 104. Another scheme in the nature of a competi- 
tive contest is to make words out of the letters of a given word 
or words and to give a prize to the competitor making the most 
words. This the Postofhce Department held was not a lottery 
scheme. It seems such contest depended on knowledge 
alone and yet there was found to be much uncertainty about it 
after all. The operators of the schemes conceded that lexico- 
graphers did not agree in every case as to what a word is. 
There was much controversy also as to whether words thai 
were spelled alike but with different meanings should be 
counted as distinct words. Some dictionaries contained more 
words than others and usually the promoter named the dic- 
tionary that should control. Proper names were ordinarily 
excluded from the count and then much discussion arose as to 
what a proper noun was. A difference of opinion also existec 
as to what derivatives and what obsolete words should be 
counted. 

One competitor in a contest of this kind suggested to the 
Postofhce Department that the operator had perpetrated a 
fraud on him by not awarding him a prize. He stated that he 
had made 475 words out of the letters in the word given in the 
case and he did not think it possible to make more words out 
of those letters. The Assistant Attorney-General for the 
Postofhce Department wrote to the operator and inquired how 
many words the successful competitor had made and he re- 
plied that he had made 5,000 and that several hundred had 
made more than 475 each. When the complainant in the case 
was given this information he was simply dumbfounded and 
it. seemed that where there was such a wide difference in the 
results of the work of the competitors, there must be so much 
uncertainty in the legitimate words that could be made as to 
amount to chance but the promoters of the schemes were not 
denied the use of the mails and are not yet, though they have 
about run their course and they are not resorted to now to any 



Lotteries, Frauds and Obscenity in the Mails. 121 

great extent. There is too nxuck work about theni to suit 
the ordinary gambler and they have not been patronized 
sumcently to make them renumerative to the promoters. 
Besides that the competitors who failed did not lose entirely, 
for they gained immensely in the knowledge of words and of 
language. 

CHAIX LETTER SCHEMES, AS LOTTERIES. 

Sec. 105. In the last few years a scheme known as the 
'"Chain Letter Scheme" has become quite popular and has 
been resorted to by the gamblers and by those who did not 
scruple to perpetrate a fraud upon a confiding and unsuspect- v 
ing public. The scheme is this : The promoter writes a letter 
to some one and states that he desires to raise money for a 
certain purpose and requests the addressee to send him ten 
cents or some other small amount and to write a similar letter 
to a certain number of his friends, the number varying in tho 
different schemes, being three in some, ter in others, etc., all 
the addressees being requested to forward the required sum 
to the promoter. Each correspondent, it states, would be- 
come the starter or originator of a series and a prize is offeree 
to each of these upon condition that the series, he originates 
or starts, would continue, without a break, till 10,000 or 
some other number named, is reached. For instance, A 
starts a series by writing letters to ten of his friends and thus 
starts a series and if all of his ten friends, all of the hundred, 
that his friends write to and all of the ten thousand this 
thousand write letters to write similar letters to their friends 
and send the required sum each to the promoter the starter or 
originator is to receive a prize but if anyone of the ten, 
hundred, thousand or ten thousand fails to do this the prize is 
lost. It is very readily seen that the chances of winning such 
a prize is remote indeed. 

In such schemes we have a forcible illustration of the pro- 
position that a prize, dependent on what others may do or not. 
■do, is dependent on chance. 

The chance feature in such schemes is too apparent to 
require further comment or elucidation. 



122 Lotteries, Frauds and Obscenity in the Mails. 

COMPETITIVE CONTESTS AS LOTTERY SCHEMES. 

Sec. 10G. Another class of enterprises lias been the sub- 
ject of much controversy and discussion in the administration 
of the Lottery Act of Congress in the last few years. This 
class embraces what may properly be turned competitive 
contests. The promoters of these contests inform the public, 
through their advertisements, that those, who buy articles of 
a certain value, shall receive a ticket or coupon and at the end 
of a given time the party returning the most tickets or coupons 
to the promoters will be awarded a designated prize. In other- 
cases the competitors are asked to accumulate and forward to 
the promoters the coupons upon the wrappers of articles of 
merchandise and those returning the greatest number will re- 
ceive prizes. It was vigorously contended that the element of 
chance was not present in these contests and hence they lacked 
one of the essential elements of a lottery scheme; but the Post- 
office Department held that the prizes did depend on chance 
and refused to allow these schemes to be advertised through 
the mails. The operators argued that these contests involved 
nothing more than enterprise, push, industry, and untiring 
activity, on the part of the competitors and that the compet- 
itors could by the exercise of these business qualities uner- 
ringly control the result. Upon examination, however, this 
argument was found to be specious and fallacious. In the first 
place no competitor knows or can know how many have en- 
tered or will enter the contest against him and in this respect 
he must work in the dark. In the second place the conditions 
under which the competitors operate are different and varied. 
One competitor may operate in a town of 10,000 inhabitants 
without opposition from anyone else, striving for the prize in 
the same territory. Another might be compelled to work in 
a field having only 5,000 people and in competition with half 
a dozen others or more. While still others might have to 
work in the fields that had already been supplied with the arti- 
cle sought to be sold or where the people had been in the habit 



Lotteries, Frauds and Obscenity in the Mails. 123 

of using another variety of the same article. And these con- 
ditions vary to such an extent that the chances of the compet- 
itors winning could not, in any proper sense, be called equal 
or said to be dependent on push and industry. In the third 
place no competitor could know how long to work or when to 
stop. He could not know whether he would have to work 
one hour a day for one day or eighteen hours a day for thirty 
days or whether he would have to devote his whole time or 
only a part of it to the business to enable him to secure one of 
the prizes; and if he should work for eighteen hours a day for 
thirty days he could not be sure of winning the prize, be- 
cause he does not know and can not know the conditions favor- 
able and unfavorable, under which the other competitors work. 

A firm in the City of ISTew York offered $3,600 in 
monthly prizes, aggregating $42,000 a year to those who 
would return to it the most coupons found on the wrappers of 
their soap, giving first, second, third, etc., prizes. The firm 
insisted that this was not a lottery scheme but a perfectly 
legitimate transaction but the Department held otherwise. An 
analysis of the scheme will clearly show its wagering character 
and its chance features. The firm had by experience proved 
that by this method it had increased its business so enormously 
it could afford to pay $42,000 annually in prizes on the con- 
tingency named. It was admitted that the returns made by 
competitors varied from 10 to 2,000, which showed that those 
who performed the work had no conception of the number of 
coupons that would take a prize of any grade but all sent in 
their coupons and took their chances in the scheme. 

Suppose 10,000 competitors entered one of the monthly 
contests and one competitor returned 2,000 coupons, another 
1975, another 1950, another 1925 and another 1900, making 
9750, and these five drew the first, second, third, fourth and 
fifth prizes and these were all the prizes offered and the 9995 
competitors returned on an average 1,000 coupons each but no 
one reaching as many as 1,900, thus making for them all 
9,995,000. Now the 10,000 earned or were supposed to have 
earned the $3,600 distributed for that month in proportion to 



124 Lotteries, Frauds and Obscenity in the Mails. 

the number of coupons returned by them respectively or 
.0003598 of a cent for each coupon. In that case the five 
winners of the prizes earned $3.50 (within a fraction) and the 
other 9995 earned $3,596.20 (within a fraction) and yet the 
whole sum of $3,600 was handed over to the five and the 9,995 
got nothing. How can such inequality among competitors 

be reconciled with the theory that the transaction was per- 
fectly legitimate and the elements of gambling and chance 
were not present? Ten thousand men, women and children 
worked for a month spending their time, energies and money 
too, to increase the sales of the firm's soap and confessedly all 
combined earned $3,600 for the firm and fire of the compet- 
itors pocket the whole sum and the other 9,995 get nothing. 
And the inequality among the five winners even, according to 
the plan, was out of all proportion to the number of coupons 
returned by them respectively. Such inequality of distribu- 
tion of profits earned must depend on chance and appeal for 
success to the gambling spirit of the people alone. The firm 
proposed to modify the plan of operations so as to give certain 
commissions for all sales of the soap or a prize to everyone re- 
turning a given number of coupons but still retaining the fea- 
ture to give the $3,600 to those who would return the most 
coupons which it was contended would eliminate the chance 
element and make the transaction legitimate but it was held 
that this failed to accomplish the result claimed for it. Each 
person had something definite to work to to get his commission 
or his prize for a given number but as to the distribution of 
the $3,600 he was compelled to proceed in the dark and take 
his chances of winning; and as to the $3,600 the scheme stood 
precisely where it did in the first place. As was said by the 
Supreme Court of the United States in the Horner case there 
is an element of certainty, that is, the certainty of receiving 
commissions on the coupons returned or of receiving a prize 
for the return of a stated number of coupons, that goes hand in 
hand with an element of chance, that is, the chance of partici- 
pating in the distribution of the $3,600. This proposition, is 
supported by all the adjudged cases. Here again it may be 



Lotteries, Frauds and Obscenity in the Mails. 125 

said that probably no gambling scheme is more successful than 
contests of this kind, for they seem so plausible and so much 
like a contest of effort, that all classes of people, irrespective 
of creed or faith, enter into them, but when the results are 
considered, no species of gambling, probably, is more thor- 
oughly oppressive than these schemes and it can be readily 
imagined what disappointment comes to the 9,995 competitors 
of all ages and sexes, scattered in every hamlet, town and city 
in the country, when they learn that after all their work they 
are to get no part of the $3,600, and that conscience must in- 
deed be seared that can hand over the earnings of 10,000 to 
five persons and pocket the profits earned almost wholly by the 
labor, efforts and industry of the 9,995 competitors, whom they 
turn away with nothing. They in fact hire 10,000 people to 
work for them and instead of paying them according to what 
they earn, they distribute the earnings of all to fL~ve and give 
£he others nothing and even make an unjust discrimination 
among the five. 

Sec. 107. In Lucas vs. Wallace, decided in 1891, it was 
held by the Illinois Court of Appeals (42 111. App. Eeps. 172) 
that a an agreement in advance of an auction sale of stock to 
present a cow to the bidder who would buy the most stock 
does not constitute a lottery and against public policy. The 
Court held that the present of the cow "was a fair premium 
offered to stimulate bidders and not unfair or against public 
policy." 

This case is not in conflict with the ruling of the Depart- 
ment on this class of schemes. All the elements of chance 
above named are wanting in the Illinois case. In that case 
the competitors were all present at the auction sale, the amount 
of stock to be sold was known and the amount of money re- 
quired to buy it all could be estimated in advance, the oppor- 
tunities for bidding of all those who chose to enter the contest 
were equal, and after the sale of an animal each competitor 
could determine how he stood in the contest and it seems if 
anyone failed to receive the prize it was not because he could 
not but because he would not control the result. It seems the 



126 Lotteries, Frauds and Obscenity in the Mails. 

prize there did not depend on chance in its gambling sense but 
depended on the purchase of the most stock by the successful 
competitor. 

Sec. 108. In Holt vs. Wood, 14 Penn. C. Ct. Eeps. 499, 
it was held that a proposal made by the owners of suburban 
lots to pay a large sum of money to the person who suggests 
the best name of a village to be built on the lots, the choice 
of names to be determined by a committee is not within the 
lottery act of Pennsylvania. 

The court there thought the scheme bordered pretty 
closely on the idea of a lottery, but added: "The prize was 
not to be determined by lot, nor, strictly speaking, by chance. 
Of course there was a chance whether the suggestion of a 
name would win the prize, but the distribution of the prize was 
not by chance; that was to be determined by a committee, who 
would select the name from all those suggested which, in their 
judgment, was most euphonious or appropriate." Nothing 
in the case indicated how the name was to be selected. 

The owners of the lots stated in their advertisement, how- 
ever, that if more than one suggested the name that should 
be chosen the prize should be awarded to the party who 
first sent in the name, and the court held that this was illegal 
and that each person sending in the name that was selected 
should get the same sum. 

Sec. 109. It was held by the Post Office Department 
that where a prize was offered to a party, who would suggest 
the name for a paper, that a committee might decide to be the 
most appropriate, the prize depended on chance and the 
scheme was a lottery. In such a case the selection of a name 
for a paper would depend on the taste or whim of the commit- 
tee and as no one could foretell or foreknow what name would 
be chosen, chance, in its gambling sense, inhered in the 
scheme. The method of choosing such a name is the same 
in principle as was the method of determining the winners of 
prizes in State vs. Short, 3 Vroom, 399, where it was held 
that the awarding of a prize to a person, whose appearance the 
promoter liked, depended on chance. 



Lotteries, Frauds and Obscenity in the Mails. 127 

In contests of this kind the distinction between a legiti- 
mate and a gambling transaction mnst be kept constantly in 
mind. It is not doubted but that a party might, in a legiti- 
mate way, offer a prize for the best name for a paper or village 
or anything else, the name to be selected by a committee, but 
when the offer involves the element of wagering or gambling, 
the transaction amounts to a lottery or similar enterprise. In 
one case the party, offering the prize, desires to get the best 
name for his purpose, while in the other he desires to make 
money and the name is of no importance or at most of sec- 
ondary importance. In the one case the competitors pay noth- 
ing, except their services, which are of no value to the offerer 
of the prize, to enter the contest, while in the other they are 
required to pay money or give their services for the purpose 
of increasing the pecuniary profits of the promoter of the 
scheme. 

Sec. 110. But the Court of Appeals of the District of 
Columbia in Lansburg vs. The United States, 11 Appeal 
Cases (D. C), 512, went further than the Department ever 
went. 

In that case it appeared that the Trading Stamp Com- 
pany, of Washington City, entered into a contract with cer- 
tain merchants, by which it was provided that the company 
was to print and deliver at the homes of the people of that city 
100,000 copies of a book containing the names of the mer- 
chants entering into the contract and giving details how cer- 
tain prizes might be obtained. The merchants agreed to re- 
ceive and buy from the company a sufficient number of trading 
stamps at fifty cents per hundred to supply their customers, 
the customers being entitled to one stamp for every ten cents 
worth of goods bought. The customers were required to paste 
the stamps received on the numbers contained in the book, 
mentioned, and when they had received 990 stamps, from one 
merchant or all the merchants, advertised in the book, the cus- 
tomers were entitled to their choice of a large variety of mag- 
nificent premiums carried in stock by the company, consisting 
of the richest designs of silver wares, books, pictures, clocks, 



128 Lotteries, Frauds and Obscenity in the Mails. 

lamps, furniture, bicycles, opera glasses, cameras, musical 
instruments, gold rings, etc. The Stamp Company was not 
engaged in the mercantile business but its business was to sell 
the stamps, print and distribute the books and furnish the 
prizes. 

After citing Yellowstone Kit vs. State, 88 Ala. 196; Long 
vs. State, 74 Md. 565; People vs. Gillson, 109 K Y. 395, and 
Commonwealth vs. Emerson, 165 Mass. 146, the Court of 
Appeals of the District of Columbia stated that it was not nec- 
essary to approve or disapprove the doctrine of these cases or 
determine whether the acts named in the case constituted the 
conduct of a lottery or gift enterprise, or even of finding that 
the element of chance operates intentionally or distinctively 
in the scheme of the Stamp Company, but the court thought 
the scheme came clearly within the meaning of a gift enter- 
prise as used in sections 1176 and 1177 of the Revised Statutes 
of the District of Columbia. The court said: "The stamps 
are sold at the rate of fifty cents per hundred to the contracting 
merchants, and yet purport to be redeemable, with premium 
gifts, at the assured value of one dollar per hundred. Unless, 
therefore, the so-called premiums, to be redistributed among 
the diligent collectors of stamps, are greatly overvalued, the 
scheme can not maintain itself, for in addition to the actual 
cost of the premiums, it has to bear the cost of the books and 
stamps and the maintenance of its office and exhibition room. 
If its premiums should have any fair value, then the stamp 
company must inevitably rely on the failure of the presenta- 
tion of the tickets for redemption by reason of its requirement, 
that not less than 990 tickets — representing cash purchases 
of $99 — shall be pasted in a book and produced at one time, 
to entitle the holder to his premium. In this event, the com- 
pany, if it actually contemplates making good its contracts, . is 
relying upon a lottery; that is to say, the chances and advan- 
tages of its game for its expectation of profit or gain." 

Here the court apparently decides that the chance ele- 
ment inheres in a scheme of this character, if it manifestly 
be based on the theory that a large number of the competitors 



Lotteries, Frauds and Obscenity in the Mails. 129 

will fail to comply with the conditions, by reason of which 
the operator will be enabled to award the prizes of the value 
he proposes to give. The court laid stress upon the fact thai 
the Trading Stamp Company was not engaged in the mercan- 
tile business and that all it did was to prepare the device, put 
it in operation and furnish and distribute the prizes. The 
court thought such a scheme, operated in such a way, was 
either a fraud or a lottery. If the prizes were not of the value 
stated the scheme was a fraud and if the prizes were of the 
value stated and the company could afford to award such prizes 
simply because a large number of the competitors would fail to 
comply with the conditions, the scheme amounted to a lottery. 
While it seems this decision is not supported by the rulings 
of the Post Office Department and the weight of the adjudged 
cases the following points in its favor may be noted: First. 
In the case of Long vs. State, 74 Md. 565; People vs. Gillson, 
109 K Y. 389, and Com. vs. Emerson, 165 Mass. 146, the par- 
ties who offered the prizes were themselves dealers in the arti- 
cles of merchandise which were kept for sale, and a prize went 
with each purchase, while in the Lansburgh case the party 
offering the prizes was not a merchant but simply devised and 
operated the scheme and furnished and awarded the prizes, and 
the .competitors were required to purchase at least ninety-nine 
dollars worth of goods each and present the stamps for the 
same before they became entitled to a prize. Second. If ex- 
perience shows that in the regular course of business a large 
number of competitors for prizes in schemes of this character 
fail to comply with such conditions as were prescribed in the 
case under review, either for lack of ability to comply or other 
cause, by reason of which an operator can afford to award val- 
uable prizes to the persistent competitors and this experience 
is the foundation stone for the scheme and the operator has no 
connection with the plan of operations except to devise and 
advertise it and furnish and distribute the prizes, it may be 
asked whether there is not present the element of gambling 
certainly and probably the element of chance, that is, the 
.9 



130 Lotteries, Frauds and Obscenity in the Mails. 

chance depending on the number that fail to comply with the 
conditions. The definition given by Mr. Attorney-Gen- 
eral Harmon in the opinion, examined in another place, to the 
effect that a lottery covers "any determination of gain or loss 
by the issue of an event which is merely contrived for the 
occasion. " That is the gain of those who receive prizes and 
the loss of those who fail is determined "by the issue of an 
event contrived for the occasion," only. And this proposition 
seems to find some support in the Bond Investment cases where 
the persistent members had an advantage over those who per- 
mitted their obligations to lapse and especially in McLaughlin 
vs. The National Mutual Bond and Investment Company, 
64 Fed. Bep. 908, in which Mr. Justice Dallas observed 
that, "The interesting question to those who participate in 
it (the scheme of the company) is one of fate and noth- 
ing else. It is this; which of those shall be forced to 
forfeit or so 'fall in fortune's strife;' and which of them, 
surviving that catastrophe, will have obtained redemption 
of their bonds before the final and inevitable collapse occurs ?" 
But there are marked differences in the plan of operation in 
such a scheme as was involved in the Lansburgh Case and the 
Bond Investment Schemes. In the former success or failure 
depended alone upon the competitor himself, while in the latter 
success or failure depended more largely on what others did, 
that is how many other members would come in, stay in and 
continue to pay their dues; and in the former there was no 
juggling with figures, while in the latter the numbering of the 
obligations was so manipulated that some of the members 
were favored by chance to the injury and loss of others. 

For a discussion of the distinction between the transac- 
tion in which a prize may be offered for a legitimate purpose 
and schemes which involve the element of a wager the reader 
is refered to Chapter II, Ante. 

LOTTERIES DEPENDENT UPON THE RESULT OF OTHER LOTTERIES. 

Sec. 111. In Wilkinson vs. Gill, 74 K Y. 63, the de- 
fendant opened a shop in New York in which he sold the right 



Lotteries, Frauds and Obscenity in the Mails. 131 

to select tickets in the Kentucky Lottery. If the numbers se-. 
lected came out in the drawing in the Kentucky Lottery the 
adventurers in defendant's scheme won, otherwise they lost. 
The statute of New York provided that a person purchasing 
an interest in an illegal lottery might recover double the sum 
of money paid. (1 E. S. 667, S. 32.) The plaintiff sued for 
money expended in the scheme above described. This was 
called "playing policy.'' Section 26 of the same statute pro- 
vided that "every lottery, game or device of chance in the na- 
ture of a lottery, other than such as have been authorized by 
law, shall be deemed unlawful." The court said: "This 
statute evidently intends to treat every game or device of 
chance in the nature of a lottery as a lottery and the use of 
that word would include all its relatives specified in the de- 
scription. The word 'lottery' has no technical legal meaning. 
It must be construed in the popular sense and with a view 
of remedying the mischief intended to be prevented. * * * 
Conceding in this case the interest purchased was not an inter- 
est in the Kentucky Lottery (which is not clear) that would 
not, it seems to me, change the substantial nature of the tran- 
saction. For a small sum the plaintiff was entitled to a much 
larger sum, depending upon the result of the drawing of the 
Kentucky Lottery. Whether that sum came from the Ken- 
tucky institution or from the defendant, or anyone else, was 
immaterial. If the drawing in the Kentucky Lottery was 
adopted, as the wheel of fortune, although the prizes were fur- 
nished by others, the character of the transaction was not 
changed. * * * If the defendant had set up a wheel of 
of his own and sold numbers, which, if drawn, would represent 
prizes, he would have had a lottery and whoever purchased 
numbers which were to be drawn would purchase and would 
have an interest in a lottery. Is the circumstance, that the 
Kentucky drawing was adopted, material in determining the 
character of the act done ? Was it not a game or device in the 
nature of a lottery ? It was a practice which is within the 
very mischief and evil intended to be remedied. It matters 
not by what name it is called or what terms are used, it has all 



132 Lotteries, Frauds and Ohscenity in the Mails. 

the essential features of a lottery and should be so construed. 
It is said the transaction is a wager or bet, that certain num- 
bers will be drawn and is, therefore, not a lottery. This does 
not follow. Every lottery that has the characteristics of a 
wager or bet or device in the nature of a lottery is not ex- 
cluded from the operation of the statute because it partakes 
of the nature of a wager. 

The courts have uniformly looked beyond the mere form 
or device of the transaction and sought out and suppressed the 
substance itself. Govs, of Alms House vs. Amer. Art Union, 
7 1ST. Y. 228 ; Hull vs. Buggies, 56 Id. 424." 

Sec. 112. The case of People vs. Elliott, 74 Mich. 264, 
involved precisely the same question. In the Kentucky Lot- 
tery thirteen numbers were drawn daily which determined the 
right to prizes ranging in value from $80 to $4,000. The 
numbers drawn in Kentucky were telegraphed to Elliot in 
Michigan who used them for a basis in his dealing. The ad- 
venturer would pay Elliot a sum of money to select numbers. 
If he selected two it was called a saddle, if three, a gig, and if 
four, a horse. If all the numbers the players selected were 
drawn in the Kentucky Lottery he won, otherwise not. Elliot 
was held to have set up and promoted a lottery for money 
within the meaning of section 9331, Howell's Statutes. Here, 
as in the Wilkinson-Gill case, it was claimed that, as Elliot had 
no drawing, he was not operating a lottery, but the court held 
otherwise, saying: "A lottery is a scheme by which a result 
is reached by some action or means taken and in which re- 
sult man's choice or will has no part, nor can human reason, 
foresight, sagacity, or design enable him to know or determine 
such result until the same has been accomplished. It was the 
obtaining of money or property by such means that our statute 
was intended to prevent and punish and I think the case before 
ns falls clearly within the statute. If the respondent had 
drawn the thirteen numbers from the seventy-eight at his 
place of business in Detroit there could be no doubt but that 
the scheme Avould have been regarded as a lottery and within 
the terms of the statute. It is difficult to see why the selecting 



Lotteries, Frauds and Obscenity in the Mails. 133 

and selling of three or more of the thirteen numbers would not 
be equally within the statute, if they were to draw prizes, if it 
was not necessary for the drawing to be done within the state 
to constitute the offense, and this, I think, was necessary. How. 
Stat., sec. 9335. It is not the drawing of the lots, but the 
disposing and selling of the chances that brings the case within 
the statute. It is promoting the lottery for money by paying 
the money for the chance of receiving more." 

Sec. 113. In Smith vs. State, 11 Atlantic Eep. 758, the 
defendant was indicted for selling a lottery ticket. The proof 
showed he had sold pieces of paper commonly known as "pol- 
icies" which entitled the purchaser to receive money on the 
happening of a certain contingency dependent upon the draw- 
ing of numbers in a lottery. The Court of Appeals of Mary- 
land held that these policies were lottery tickets, under the 
Maryland statute, which required the courts to "adjudge all 
tickets, parts of tickets, certificates or any other device what- 
soever by which money or any other thing is to be paid or de- 
livered on the happening of any event or contingency in the 
nature of a lottery, to be lottery tickets." 

LAND LOTTERIES. 

Sec. 114. In IT. S. vs. Olney, 27 Fed. Gas., p. 234, the 
action was brought to recover the sum of one hundred dollars 
alleged to be due the United States from defendant as a special 
tax for engaging in the business of a lottery dealer. The evi- 
dence showed that the defendant, being the owner of six hun- 
dred town iots, divided them into parcels ; three hundred of 
such parcels consisted of one lot, each of not less than fifty 
dollars value; the other three hundred were denominated 
prize parcels and consisted of two, four and six lots, each of 
the value of fifty dollars, and single lots varying in value 
from $100 to $600 ; one house and lot of the value of $1,000 ; 
and one cottage and three lots of the value of $5,000. The 
lots were sold at the uniform price of $50 each, and were 
awarded to the purchasers by drawings. 



134 Lotteries, Frauds and Obscenity in the Mails. 

The court, holding the scheme to be a lottery, decided the 
following points : 

First. — That it made no difference that each adventurer 
got something in return for his money or that he might receive 
full value of his money in any event. 

Second. — That each adventurer purchased an interest in 
the property and at the same time a chance for a prize. 

Third.— The certificates of purchase issued to the pur- 
chasers of lots constituted lottery tickets. 

Eourth. — That the purchasers did not become tenants in 
common of the lots, but each bought the right to have, by 
allotment, one of the three hundred lots estimated to be worth 
fifty dollars each and the chance of obtaining instead of such 
lot one of the three hundred prize parcels represented to be 
worth from one hundred dollars to five thousand dollars. 

The court, in answering the argument of the defendant 
that the purchasers bought the 600 parcels in common and, 
after thus becoming the owners of the same, adopted this 
method of dividing them among themselves, said: "If per- 
sons already owning family plate, pictures, or other prop- 
erty, not susceptible of division or even equal division, choose 
to distribute by an appeal to lot what has thus come to 
them before they had any scheme of so distributing it, they 
are not within the definition of a lottery nor liable to this 
special tax. They have not given a valuable consideration 
for the chance of obtaining something of much greater value — 
a prize. 

The argument of the defendant is ingenious and plausi- 
ble, but it is based upon an incorrect assumption. It ignores 
the fact — the mainspring of the whole transaction — that the 
tickets were sold and purchased for the avowed purpose of 
giving to each of the purchasers a chance to obtain a prize 
parcel by means of this subsequent allotment. The division 
by lot was not an after thought of the purchasers but a promi- 
nent part of the original scheme of sale and distribution as 
prepared by defendant." 



Lotteries, Frauds and Obscenity in the Mails. 135 

The learned judge, deciding this case, makes here the 
distinction between acquiring property by lot and dividing 
property, already owned, by lot. The former would be a 
lottery and the latter would not. This distinction is based 
on the theory that in the former case the owners could not be 
regarded as giving a valuable consideration for the chance of 
a prize. But do they not give a consideration in that each 
one stakes his share or interest for the chance of obtaining the 
whole ? It seems that in such case the division of common 
property by resorting to chance in any form would at least 
amount to a wager or bet, whether the property he acquired 
with the intent to so divide it or not. Property can be di- 
vided into lots of as equal value as possible and the lots thus 
divided may legitimately be awarded to the respective own- 
ers by chance, without bringing the scheme within the mean- 
ing of a lottery, and the same may be said of an heirloom or 
other article capable of division where the interests of each 
owner may be estimated on an equitable basis in money and 
then it may be determined by lot who shall have the article by 
paying the others for their interests. 

In a practical sense this decision has operated to the in- 
jury of the public morals. Gamblers have seized upon it 
and have so planned their schemes that ostensibly and so far 
as the obtainable evidence went they came within the principle 
there laid down ; and many schemes were advertised through 
the mails, the true character of which could not be ascertained 
until after the distribution of the property had actually taken 
place. 

The schemes on their face made the adventurers owners 
in common of the property and all plans for final division 
were concealed but when the wind up came it became manifest 
that a distribution by lot or chance was intended from the in- 
ception of the schemes. The history of this case is another 
illustration of the adage: Give a man an inch and he will 
take an ell, or as it should read as applied to gambling : Give 
a gambler an inch and he will take a mile. 



136 Lotteries, Frauds and Obscenity in the Mails. 

There would be nothing pernicious in the Olney case if 
it could always be made plain what the original intent is in 
regard to a division of property, but unfortunately this can 
not be done and it gives gamblers a covert in which to conceal 
their wagering transactions. 

Sec. 115. In Branham vs. Stallings, 21 Colorado, 211, 
52 Am. St. Reps. 213, the record showed that certain parties 
organized the "Denver Lot Club" and entered into an agree- 
ment, by the terms of which they were to pay two dollars 
weekly and drawings were to be had every Monday. One of 
the parties drew a lot at the first meeting, which cost him only 
two dollars ; one drew a lot at the second meeting which cost 
him only four dollars, and so on. The drawings were to 
continue for sixty weeks. It does not appear in the report of 
the case that those drawing lots ceased to pay their weekly 
dues but it is probable they did. This was held to be a lot- 
tery by the Supreme Court of Colorado. 

Sec. 116. The Shelbyville Eeal Estate Company ad- 
vertised that on a certain day a sale of lands to the amount of 
150,000 acres by the company would take place; that upon 
this amount of stock the company had issued 50,000 shares, 
which would be sold at three dollars each and the company 
would distribute the property among the shareholders by the 
numbers of their certificates under the management of re- 
sponsible gentlemen. The number of prizes was stated to be 
3,329, the number of tickets or shares being 50,000. 

This was held to be a lottery scheme in Swain v. Bussel, 
110 Ind. 438. 

Sec. 117. In Wooden vs. Shotwell, 23 K J. L. 470, 
Wooden had divided a parcel of land into 58 lots of unequal 
value from $50 to $600 per lot and disposed of them at $7.5 
each and the particular lot of land to which each person was 
to receive a title was to be determined by lot. The supreme 
court of New Jersey said this was, both in form and substance, 
a lottery. "The difference in that case and the present is 
merely in degree of advantage or disadvantage of the parties 



Lotteries , Frauds and Obscenity in the Mails. 137 

in the amount to be paid and the proportionate values to be 
received as between those who make the payments. The 
method of distribution in either involves the objectionable 
feature of chance upon the choice of property of higher or 
lower value and greater or less price and is determined with- 
out the exercise of will and judgment of the parties. The 
manner in which the chances in this case were determined is 
even more objectionable. Here, 47 lots were made the sub- 
ject of choice for the selection of but 35 lots and thereby added 
to the objection of distributing 35 lots by chance the further 
vice of placing the appellant's remaining 12 lots in the scale, 
with locations, character and values all depending upon the 
result of the drawing." 

This scheme was again before the same court in Den. ex 
Bern. Wooden vs. Shotwell, 24 E". J. L. 789, where it was con- 
tended that the plan adopted was merely to make partition 
among the purchasers. The court held that they did not re- 
ceive deeds until after the drawings and the court further 
held that the scheme was a lottery, and that "the plan was a 
contrivance for the distribution of prizes by chance; a reli- 
ance upon the result of hazard ; a decision of the values of the 
adventurer's investments by the favors of fortune." 

Sec. 118. In Chaney Pork Lard Company vs. Hart, 73 
N". W. Rep. 1059, the record showed that Pearoe, Denham 
and Barker undertook to induce the Iowa Packing Company 
to erect a pork packing and beef killing plant at Clinton, 
Iowa, and, in order to obtain a site therefor, and to pay a bo- 
nus, entered *into a contract with Allen and Hall for the pur- 
chase of 96 acres of land, with the condition that the grantors 
should plat a part of it into lots and streets and execute an 
agreement for the conveyance of the lots at the price of $300 
each to the purchasers, as directed by the grantees, in the 
event that 225 lots were sold. The grantors agreed to take 16 
lots at the price named. It was agreed that the lots should be 
apportioned among the subscribers in such a manner as they 
should decide. The subscribers met and agreed upon a plan 



138 Lotteries, Frauds and Obscenity in the Mails. 

of allotment. A drawing committee was appointed and the 
names of all subscribers placed in a box and the numbers of 
the lots were put in another box. The names and lots were 
drawn and the person got the lot that was drawn to corres- 
pond with his name. The lots varied in value though none of 
them was worth more than the price agreed to be paid. The 
suit was brought to foreclose the contracts for the purchase of 
the lots and the defendants interposed, as a defense, that the 
method employed in distributing the lots constituted a lot- 
tery, and hence the contract was obtained by fraud. The 
court found the promoters wanted nothing to do with the meet- 
ing of the subscribers and that the method of apportioning 
the lots and the apportionment thereof were determined upon 
and carried out by the subscribers alone. The Supreme Court 
of Iowa said : "The sale of the lots to the subscribers in this 
case was not in pursuance of any design to promote a lottery 
or in evasion of the law. Each subscriber contracted — as he 
had a right to do — for the purchase of one of the lots, with the 
understanding that they should be apportioned as the sub- 
scribers themselves might determine. Having agreed to buy 
before the land was platted — induced by a desire to aid an 
enterprise of an anticipated advantage to the city — they con- 
cluded * * " v to make the selection of drawing the number of a 
lot and a name from different boxes at the same time. We know 
of no good reason why these purchasers did not have the right 
to divide their property, according to their own notions and 
agreement. We have discerned no authority denying them 
that right, but, on the contrary, it is recognized in Com. v. 
Manderfield, 8 Phila. 45 7 ; 2 Whort. Crim. Law, S. 1891; 
Yellow-Stone Kit vs. State, supra. Joshua so apportioned 
the promised land among the seven tribes of the children of 
Israel. The disciples of Christ chose Mathias to succeed 
Judas by casting lots. Under the laws of this State the right 
to an office is determined when there is a tie vote by the same 
method. Code S. 1169. There was nothing in the transac- 



Lotteries, Frauds and Obscenity in the Mails. 139 

tion opposed to good morals, and it was not a lottery within 
the meaning of the law." 

Sec. 119. In Paulk vs. Jasper Land Company, 22 So. K. 
495 (June 16, 1897), the defendant offered lots in a town of 
3,000 lots for $100 each, the lot each one was to finally get a 
deed for was to be drawn by means of numbered cards and the 
party was also to get paid up stock for one half of the amount 
he paid for lots in future corporations to be created, and into 
which 50 per cent of the money the promoter received was to 
be invested. The Supreme Court of Alabama held this to be 
a lottery and that a party paying money on this scheme could 
not recover it back on the ground that it was a gambling trans- 
action under section 1742 of the Code of that State. The 
Court said a lottery was gambling. 

Sec. 120. In Seidenbender vs. Charles, '4 Sergeant and 
Eawle, 151 (8 Am. Dec. 682), which was a suit on a note to be 
paid "on the delivery of a deed in fee-simple to the drawers of 
the note for such lot of land, as shall be drawn against certfi- 
cate ^o. 102, purchased by them in the town of Blue Rock," 
the evidence showed that a party, possessed of a tract of land, 
on the banks of the Susquehanna, divided it into town lots, 
which he sold for $330 each, the specific lot to be awarded to 
each purchaser by lot. The lots were of very unequal value. 
One, on which the dwelling house was erected, was valued at 
$11,000. Another, having a barn on it, was valued at $3,000. 
Two others had wooden buildings on them. The lots, abut- 
ting on the river, were peculiarly valuable, but the great mass, 
which lay bac^ from the river, and were unimproved, bore no 
proportion to the price at which the tracts were sold. 

The defense was that the note was given for the purchase 
of a ticket in a lottery and as opposed to this defense, it was 
contended that the transaction was merely a sale of a tract of 
land, for an adequate consideration, not forbidden by law, and 
the distribution of the lots to the purchasers was simply a par- 
tition of land among tenants in common. The Supreme Court 
of Pennsylvania decided the scheme was a lottery. Chief 
Justice Tilgman, in his opinion, in reply to the contention that 



140 Lotteries, Frauds and Obscenity in the Mails. 

the distribution of the lots was simply a partition among ten- 
ants in common, said: "But this is directly contrary to the 
truth; for until the lottery was drawn, no purchaser had any 
right to any part of the land; and when it was drawn, they 
took very unequal interests designated by the chance of the 
wheel. When tenants in common make partition, they are 
seized of the whole estate before partition, and the object of 
the lot is to assign to each his particular portion, the whole 
having been previously divided into parts, as nearly as possible, 
of equal value. The two cases are so extremely dissimilar that 
the mind is struck with the difference, before it can frame an 
argument to prove it." 

Sec. 121. The sale of lots of equal value to be desig- 
nated by a committee of citizens on fair grounds was held by 
the Court of Appeals of the Second District of Illinois in Lan- 
der vs. P. A., and T. Soc, 71 111. App. Eeps. 475, not to be a 
lottery. The court remarked that "the real substance of the 
transaction probably was a subscription to appellee for its cor- 
porate purposes." 

Sec. 122. In Elders vs. Chapman, 176 111. 142, a syn- 
dicate was formed for the purchase of certain lots under an 
agreement, providing that there should be as many share- 
holders as lots; that after all the shares had been sold, the lots 
should be assigned to the shareholders under the direction of a 
board of directors, elected by the shareholders; that the di- 
rectors should receive bids for the choice of lots, the highest 
bidder to make his choice; that bids should then be received 
for the choice of lots remaining unselected, until there ap- 
peared to be no other choice, when the remaining shareholders 
should draw by lot for the remaining unselected lots. The 
Supreme Court of Illinois, in October, 1898, held that this 
scheme was not a lottery. The Court asserted that there was 
a wide difference between a division of property by lot and a 
lottery, and that joint owners of property might make parti- 
tion of it by lot, having first divided it into as nearly equal 
parts as possible, and that in the case before the court the par- 
ties, getting choice of lots, had to pay for it and what they paid 



Lotteries, Frauds and Obscenity in the Mails. 141 

went to all the investors but when no one would bid for a 
choice, there was no difference in the value of the unselected 
lots and that they, then being of equal value, could be dis- 
tributed by lot. 

Sec. 123. In Lynch vs. Rosenthal (Sup. Court Ind., 
Feb'ry 21, 1896), 42 K E. Rep. 1103, and 31 Law Rep. Ann. 
S35, Lynch laid off a tract of land into 54 town lots. He of- 
fered for sale forty-eight of the lots including a prize lot at 
j prices varying from $100 to $300, according to class and loca- 
| tion, but he sold only thirty-five of them. Forty-seven num- 
bered slips were placed in a box and the names of thirty-five 
purchasers in another, and these were drawn out, one out of 
each, and the person whose name was drawn was to get the lot 
whose number was drawn at the same time. Deeds were to be 
made out after the drawing and at that time one-half of the 
purchase money was to be paid and the other half when Lynch 
should erect and put in operation a furniture factory near the 
lots. The "prize lot" was to be given away and its award was 
to be made in some manner to be agreed upon by the parties 
interested. In a suit against one of the purchasers to enforce 
the contract the scheme was held to be a lottery. The Court 
said: "Whether he (the purchaser) was to pay $100 or $300 
was a question over which he had no choice. * * * Any 
advantage in the selection by reason of location, character, size 
or condition of the lot from any of the various classes, as ar- 
ranged by the prices marked, was not to be determined by the 
judgment of the subscriber or the seller, but depended wholly 
- on the chances to be settled by the lot. Distribution by chance 
was never mose certainly contemplated, and if not so contem- 
plated the manner in which the appellee's alleged purchase 
was determined was never outrivaled as a method of chance 
nor even by the guessing upon the number of beans in a globe 
for, in that instance, the person to be benefited exercised his 
own judgment in determining upon a number." The Court, 
after citing the case of Hudelson vs. State, 94 Ind. 426, con- 
tinued: "The method adopted was no less objectionable as 
one of mere chance than the methods of the old Louisville 



142 Lotteries, Frauds and Obscenity in the Mails. 

Library Association or the more recent Louisiana Lottery. 
* * In this case the subscriber is to get a lot more or less 
valuable depending alone upon chance ; and he is to pay for it 
a sum more or less depending alone upon chance. * * * 
Here 47 lots were made the subject of choice for the selection 
of but 35 lots and thereby added to the objection of distribut- 
ing 35 lots by chance the further vice of placing the appel- 
lant's remaining 12 lots in the scale, with locations, character 
and values, all depending upon the result of the drawing." 

The scheme in the case of Ridge way vs. Underwood, 20 
Fed. Cases, 760, was similar to that in U. S. vs. Olney and it 
was also held to be a lottery. 

Sec. 124. In Washington Glass Company vs. Mos- 
baugh, 49 1ST. E. Rep. 178, the record showed two contracts, 
which were construed together. 1. A contract between the 
Cicero Improvement Company and Mosbaugh and others ; and 
2, a contract between the Washington Glass Company and 
the Cicero Improvement Company. In the contract first 
mentioned, it was recited that the Improvement Company 
was trying to locate one or more factories and, as an induce- 
ment to such location, it proposed to lay out a tract of land 
into town lots and to encourage such location the subscribers 
agreed to take the number of lots set opposite their names 
at a price not to exceed $200 per lot. The contract con- 
tained this stipulation : "This agreement is made on the . 
express condition that one or more factories shall be located 
in the said town (Cicero). The lots hereby contracted for 
shall be apportioned and located for each subscriber as the 
subscribers hereto shall agree when said lots are laid out in 
proportion to the amount paid for such lots by the subscrib- 
ers." The second contract provided that the Glass Company 
should build on certain land one 16-pot glass-bottle factory, 
that it was to employ not less than 150 hands, that the weekly 
pay roll should not be less than $1,500 and that it was to lay 
out and plat certain lands into town lots and that the Im- 
provement Company was to procure the sale of 150 of said 
lots at an average of $200 per lot. This contract further 



Lotteries, Frauds and Obscenity in the Mails. 143 

provided that the purchasers were to make selection of the 
lots in pursuance of the contract under which the subscrip- 
tion for such lots had been made. The Glass Company laid 
out the town, built the factory, employed 150 men and paid 
out over $1,500 on its weekly pay roll. The subscribers for 
lots met and, after much discussion, agreed to put strips of 
paper, each strip bearing the name of one subscriber, into a 
receptacle, and the same drawn out by a committee, the first 
name drawn out to have first choice of lots, the second the 
second choice and so on. After the drawing was over, the 
parties repaired to the town site to select their lots. Mos- 
baugh' s name having been the 79th drawn, selected lot 25 
and took possession and the other subscribers made their 
selections also. The lots drawn were of unequal value but it 
was shown that the Glass Company had nothing to do with 
the method adopted for the apportionment of the lots among 
the subscribers. Mosbaugh, having failed to pay for the 
lot he selected, the Glass Company sued him for the balance 
due. One of the defences he interposed was that the scheme 
was a lottery and for that reason no recovery could be had. 

The Supreme Court of Indiana held, however, that the 
Company could recover because it appeared that it was not 
in any way responsible for or connected with the unlawful 
scheme of Mosbaugh and others and that the contracts 
themselves were not tainted with any vice that would 
vitiate them. The Court further remarked that the Glass 
Company, relying in good faith upon the terms and condi- 
tions of the contracts, proceeded to erect the factory and 
invest jts money, employing 150 men and paying out weekly 
more than $1,500. 

The Court cited the case of Lynch vs. Rosenthal, 144 
Ind. 86, 42- N". E. Rep. 1103 and approved the doctrine there 
laid down. 



144 Lotteries, Frauds and Obscenity in the Mails. 

GUESSING CONTESTS IN CASES WHERE STATISTICS ARE TO BE CON- 
SIDERED. 

Sec. 125. In Hall vs. Cox, 1 Q. B. (18-99), page 198, 
the record shows that the publisher of a paper, called the 
Rocket, offered a prize of £1,000 to its readers for a correct 
prediction of the number of male and female births and the 
number of deaths in London during a specified week. The 
competitors were required to give their estimates on vouchers 
published in the paper and they were not limited to one pre- 
diction. Consolation prizes were offered, under the same 
conditions, for correct predictions or approximations to the 
number of male and female births and deaths respectively. 
On appeal to the Court of Appeals this scheme was held by 
Justices Smith, Rigby and Collins not to be a lottery, fol- 
lowing Caminada vs. Hulton (1891) 60 L. J. (M. C.) 116 
and Stoddard vs. Segar (1895) 2 Q. B. 474. Smith, L. J., 
said: "The result, no doubt, depends largely on chance but 
not entirely and the cases show that to constitute a lottery it 
must be a matter depending entirely upon chance. There 
is an element of skill in the inquiry in this case dependent 
on the investigation of the returns of the previous years and 
the conditions of the increase of the population, the death 
rate and such like statistical investigations." 

Sec. 126. Here , as in the news paper case decided, by 
the Attorney-General and the Toronto and New Bninswick 
cases, the Court loses sight of the fact that each guesser 
reaches a point in his estimates where he realizes he is in the 
field of speculation and chance and especially in this case 
that the guesser had to give the exact number of female births, 
male births and deaths before he could receive the £1,000 
prize. In such a case the probabilities of losing are greatly 
increased. Suppose there were only two numbers in the 
female births, two numbers in the male births and two num- 
bers in the deaths, then the guesser would not have sufficient 
data to enable him to determine which of the two in either 
case he ought to name. The chances of naming the correct 



Lotteries, Frauds and Obscenity in the Mails. 145 

number in each class would be even, but the chances of his 

naming the correct number in two classes would be one in 

■■--". 
four and in three classes one in eight. Cham. Encyc, Title 

"Probability, The Mathematical theory of," and Ency. Brit. 

Same Title. 

But the numbers about which the guessers would have 
doubt would be largely in excess of two and in such case the 
chances of naming the correct number in all three classes 
might amount to thousands. 

The promoter of this scheme evidently thought the re- 
sult of the contest depended entirely on chance. This clearly 
appears from the fact that he offered a prize of £1,000 
($5,000) to the winner and from the further fact that he 
gave each contestant as many guesses as he saw proper to 
make. He realized that the probability of an absolutely 
correct guess as to the number in the three classes was so 
remote that he could afford to take the risk he did take and 
the prize was so large the people would be induced to spend 
large sums of money in the aggregate to win it. Besides the 
capital prize offered to the person making an absolutely cor- 
rect prediction he offered consolation prizes (to be determined 
by him) for approximations to the correct number. 

This was unquestionably a gambling transaction and the 
prize was. made dependent on chance in its gambling sense 
and according to the course of decisions in the United States 
it was a lottery scheme. 

Sec. 127. A newspaper advertised an enterprise or 
scheme by which it offered to give the sender of the first guess, 
giving the correct or nearest correct number of votes of the 
Democratic and of the Kepublican candidates, respectively, 
for the office of Secretary of State for the State of Ohio at the 
election next ensuing, $100 each; and to the sender of the sec- 
ond correct or nearest correct guess (if no correct guesses 
should be received) of the vote of either candidate, $50 each; 
and to the sender of the third correct or nearest correct guess 
(if no correct guesses should be received) for each candidate 

10 



146 Lotteries, Frauds and Obscenity in the Mails. 

$25; and $5 eacli to the senders of the next fifteen correct 
or nearest correct guesses (if no correct guesses should be re- 
ceived) on each candidate thus offering to give the sum of $500 
to thirty-six persons. The guesses were to be made on blanks, 
cut from the paper. The Attorney-General of the United 
States, Hon. W. H. Miller, in passing on this scheme, on Jan. 
24, 1890, held that the award of the prizes did not depend 
either on lot or chance. The General used this language : 

"It will hardly be contended that the enterprise under 
consideration was dependent on lot. "Was it dependent upon 
chance within the meaning of the statute ? In a certain sense 
and in a certain degree, perhaps, any prediction, as to human 
action, may be said to be dependent upon chance; that is to 
say, it is in some measure dependent upon circumstances, the 
happening of which can not be anticipated or foretold with any 
degree of certainty. * * * A student of Statistics might 
know approximately the number of Republican votes and the 
number of Democratic votes in the State of Ohio; he might 
approximate the ratio, in which one or the other might increase 
or decrease in a given year. It is quite likely that his estimates 
would often be wide of the mark, but it would not be by reason 
of chance but by reason of causes in regard to which he had 
formed erroneous estimates. It would hardly do' to say that a 
child or a school boy could form as correct an estimate in the 
matter, as an experienced politician, who had given 
weeks and months of steady attention to the consideration of 
the question. But without further elaboration, I am quite 
clear that estimates, made upon the probable political action 
of the people, in a given State, in a pending election, can not 
be said to be dependent upon chance within the meaning of 
this statute. " It was argued by the Attorney-General, in this 
case, that a prediction, that a man, who has for a long time, 
maintained certain political opinions, will continue on the 
same line, is not dependent on chance. He admitted that a 
man might utterly change his opinions but such change would 
not be purely a matter of chance. 



Lotteries, Frauds and Obscenity in the Mails. 147 

This opinion can not be supported on reason or authority 
and its influence on the administration of the Lottery Act has 
been deleterious in the extreme. The gamblers never failed 
to cite this opinion in support of their proposed schemes and 
many times it had to be conceded that, if the principle , an- 
nounced therein, was applied, many gift enterprises, which 
were excluded from the mails, should have been admitted. 
If the fact, that stakes are laid on the issue of an event, be 
a test of the presence of the chance element in it then the result 
of an election unquestionably has in it that element for, it is well 
known, that there is,probably, more money lost and won on the 
result of elections than any other one thing, unless it be cards 
and horse races. It is not claimed that the result of an elec- 
tion depends on chance, any more than the future state of the 
market in regard to stocks or grain depends on chance, but 
it is insisted that so far as the adventurers are concerned there 
is chance, because they do not know and can not know, and 
can not, in advance, by their knowledge and foresight, predict 
or determine or control the result. But Attorney-General 
Miller undertook to show that a person of experience and 
political knowledge would, in such a contest, have an advan- 
tage over one of inexperience and ignorance and he thought a 
child or school boy could not form as correct an estimate in 
such a matter as an experienced politician, who had given 
weeks and months of steady attention to the consideration of 
the question ; and yet he said that while a student of Statistics 
might know approximately the number of Republican and 
Democratic votes in the State of Ohio and might approximate 
the ratio in which one or the other might increase or decrease 
in a given year, it was "quite likely his estimates would often 
be wide of the mark," and then he adds that this would not be 
"by reason of chance but by reason of causes in regard to which 
he had formed erroneous estimates.^ The statement that a 
student of Statistics, who had devoted months to the study of 
the subjects, would quite likely be wide of the mark in his esti- 
mate of the votes, that the Republican and Democratic candi- 
dates would receive at a given election, concedes the whole 



148 Lotteries, Frauds and Obscenity in the Mails. 

ground, especially, when it is further stated that the failure 
to make a guess not "wide of the mark" would be by reason 
of causes in regard to which the guesser had formed erroneous 
estimates. 

Sec. 128. Do not these statements bring the uncertainty 
here exactly Avithin the definitions of chance heretofore given \ 
If the most experienced man may quite likely be "wide of the 
mark," because there are many occult causes, in regard to the 
operation of which he forms erroneous estimates, what would 
be the status of the masses of the people to whose gambling 
spirit such a guessing contest directly appeals? It is a fact 
that the most experienced politician would, in his estimates 
of the votes of the respective candidates, reach a point where 
he would be conscious of having entered a field of mere specu- 
lation, of mere luck or chance and in selecting a number his 
mental condition would be the same as in the selection of a 
number in a lottery or raffle. In either case he would be 
conscious of groping in the dark and that if he should select 
a winning number it would be due wholly to chance. He 
might be influenced in the selection by sentiment or by :i 
whim, such as taking an odd or even number, or by taking 
what are popularly supposed to be lucky numbers, but at the 
same time he would feel his knowledge of the subject was of 
no use to him. These observations apply, of course, with 
certain limitations. Every intelligent guesser would feel sure 
of his ground up to a certain point; but what is meant to be 
asserted here is that he would, in his estimates, finally pass the 
line between certainty and uncertainty and enter the region 
of doubt, where choice would rest upon chance and not upon 
his knowledge, foresight or sagacity. 

That the Attorney-General was correct when he said 
the experienced statistician would quite likely be "wide of the 
mark" is shown very clearly during every election, when com- 
mittees of the political parties, after two or three most careful 
polls of the State or district, give out estimates, which astonish 
them when the actual count is announced; and two months 
after the presidential election of 1896 five leading newspapers 



Lotteries, Frauds and Obscenity in the Mails. 149 

in the United States published the vote for president and 
there was a difference in their figures of over 40,000. If it 
be difficult, therefore, to accurately and unerringly count 
13,000,000 votes, would it be inaccurate to say that a guess, 
in advance, as to the number of votes certain candidates would 
receive, depends on chance ? And the same rule would apply 
to an election in a State, district, county or town. Of course 
the extent of the field of speculation, luck or chance would be 
in direct proportion to the size and population of the' territory 
in which the election is held, but the guesser in that field, 
whether large or small, would, in order to win, have to rely 
on chance and not on his will or judgment or foresight. 

Sec. 129. The Attorney-General added that the lottery 
Act of Congress was passed, as was well known, to suppress 
the Louisiana Lottery and kindred concerns and he thought 
an attempt to bring such guessing contests as this within the 
Act would result in injury rather than good in the adminis- 
tration of the law. He failed to recognize the well known 
fact that, if you give a gambler an inch, he will take a mile. 
Yield one point to a gambler and he boldly steps upon it, and 
using that as a vantage ground, forthwith, presses for the 
yielding of other points. The postoffice Department followed 
the ruling of General Miller because he was the ranking law 
officer of the Department, and in carrying out the principle 
he announced- to its logical results, at the earnest solicitation 
of the gamblers of the country, admitted to the mails the ad- 
vertisements of other schemes, which, it was felt all the time, 
involved all the elements of a lottery, including that of 
chance. These schemes were guessing as to the number of 
bales of cotton that would be raised in the United States or 
the number of bales that would be marketed at a certain city 
in a given year, or as to the amount of bank clearances in a 
certain city on a day named, the clearances for two or three 
weeks previous being given, or as to the number of words 
that would appear in a certain column of a newspaper in a 
future issue named, the publisher stating that the same class 
of matter and the same kind of type would be used in the 



150 Lotteries, Frauds and Obscenity in the Mails. 

paper all the time and defining what would be regarded as 
words in the count. The schemes in regard to bank clearances 
and the words in the column of a newspaper failed because 
they did not prove popular and the other scheme in regard 
to the production or sale of cotton was not resorted to, to any 
great extent. 

Sec. 130. In 1896 a company offered prizes amounting 
to $105,000 to those who would give the correct or nearest 
correct guess as to the number of votes the candidates for 
president that year would receive, the capital prize being 
$50,000. And soon after the election that year an enterpris- 
ing party devised an elaborate scheme, by which he offered 
large prizes to those, who would give the correct guess or 
nearest correct guess as to the number of votes the candidates 
for president would receive in 1900 and 1904 but the Post- 
office Department drew the line at this scheme, holding that it 
did not come within the principle laid down by the Attorney- 
General. And again a newspaper offered prizes to those guess- 
ing who would be nominated for president and vice-president, 
in 1896, by the various parties and the Department refused 
to let this scheme be advertised through the mails, though it 
was strenuously insisted that the principle of Attorney-Gen- 
eral Miller's opinion covered such a case. In fact the gamblers 
sought to have that opinion cover nearly all the well known 
gift enterprises of the time and after several years experience 
with them, the Department finally restricted the operation of 
the principle of that opinion to the precise case stated in it, 
that is to a case where the candidates had been nominated and 
the platforms adopted, and even in such a case it felt there was 
a lottery. It is to be hoped that the question will be taken to 
the courts, or again to the Attorney-General, when that 
pernicious principle can be overthrown, as it will assuredly 
be, when it is re-examined in the light of the cases that have 
been decided and in the light of the experience of the Depart- 
ment in the administration of the Lottery Act since 1890. 

Every civilized nation on Earth makes wagering on elec- 
tions, not only illegal, but also, in many cases criminal, as 



Lotteries, Frauds and Obscenity in the Mails. 151 

being against public policy and good morals; and lottery gam- 
bling, in the guise of guessing contests on the result of elec- 
tions in our country, should be condemned in the strongest 
terms, instead of having the sanction of the Administrative 
Departments at Washington City. 

Sec. 131. An excellant illustration of what is meant by 
even an expert guesser reaching a field of mere luck and 
speculation in this class of cases appeared in the daily papers 
not long since. It was stated that the Assistant Director of 
the Census estimated that the population of the United States, 
which will be shown by the census of 1900, will be about 
75,000,000; the Government Actuary's estimate was 
77,676,000 and that of the Superintendent of the Coast 
Survey was 77,472,000, the latter qualifying his calculation 
by saying it left a margin of a possible error of 250,000. 
Here we find a difference in the estimates made by three men, 
who may very properly be regarded as experts on the subject, 
of 2,677,000 in one case, 2,472,000 in another and 204,000 
in still another, with one of the parties giving a margin of a 
possible error of 250,000. The party giving this margin no 
doubt felt that, availing himself of all the statistics and 
information within his reach, he was still in the field of chance 
to the extent of 250,000 and the Assistant Director of the 
census no doubt realized that he had reached the field of 
chance also, for he estimated the population would be about 
75,000,000. Can anyone hesitate for a moment to say that a 
prize offered, by way of wager, to one of these three men, 
who would guess nearest the population of the Country next 
year would depend on chance ? 

Since the above was written Gen. Merriam, Director of 
the Census, has estimated that the coming census will show a 
population of about 72,500,000, thus showing a difference in 
the estimates made by him and that made by the Assistant 
Director of the Census of 2,500,000 and between his estimate 
and that made by the Government Actuary of 5,176,000. 
Where such differences in estimates between experts exists 
there can be little question that money, payable upon making 



152 Lotteries, Frauds and Obscenity in the Mails. 

a correct estimate or the nearest correct estimate in cases of 
this class, must necessarily depend on chance. 

GUESSING CONTESTS ; CONTENTS OF VESSELS AND WEIGHT OF 

ARTICLES. 

Sec. 132. Lottery gambling, in the form of guessing 
contests as to the contents of vessels and the weight of articles, 
has prevailed and still prevails very extensively. These con- 
tests are gift enterprises, as a rule, that is, they involve the 
transfer of rights of an independent value, together with the 
right to participate in a disposition of property by chance, for 
which a valuable consideration has been given. These con- 
tests were and are resorted to by some business men for the 
purpose of advertising their wares or increasing their sales. 
Merchants place in their windows or places of business, vessels 
filled or partially frilled with shot, beans, peas, wheat, buttons 
or something else of a kindred nature, or cakes of soap or 
other articles, and offer prizes to those who guess the correct 
or nearest correct number of shot, beans, etc., in the vessels, 
or the weight of the soap or other articles. Where the 
guessers are expected to see the vessels, soap or articles, before 
making estimates of their contents or weight, the size of the 
vessels or soap or article is not stated, and the competitors 
must determine for themselves first, what the sizes are, then 
make their estimates of the contents of the vessels or the 
weight of the soap or other article. But where the guesses 
are sent by mail, the operators of the schemes usually give the 
sizes of the vessels or soap or article, though probably there 
has been no contest in regard to the weight of an article, 
where the competitors did not see or were supposed to see the 
article itself. Usually the vessels are very large and only 
partially filled witl} shot, beans, etc., of different sizes, so as to 
increase the chances of making correct estimates. After ex- 
perimenting with these contests for some time, the Postoflice 
Department finally held that the uncertainty of giving a 
correct estimate, in regard to the contents of the vessels or 
weight of the articles, amounted to chance, where it plainly 



Lotteries, Frauds and Obscenity in the Mails. 153 

appeared the transactions involved the element of a wager or 
gambling. As to the beans, peas or grains it became manifest 
where the offer of a prize was made to the pnblic in a large 
country like ours and the answers were to be sent by mail, 
the chance element was present, though the exact inside size 
of the vessel was given, for these reasons: 

First: The varieties of beans, peas, wheat, oats, etc., 
were numerous and the sizes of these cereals, even of the same 
kind and variety, depended upon climatic conditions, soil, 
seasons and cultivation to such an extent it was impossible for 
a competitor to make anything like a correct guess, even by 
filling a vessel of the size given, with the articles named 
and then counting them. And in the second place, it was 
found by experiment, that a vessel might be filled with the 
same variety of cereal, raised in the same field, several times 
and then counted, and the count would vary each time. 

Sec. 133. A quart measure was filled, heaping full, with 
common navy beans and a straight edge passed over it and then 
by shaking and pressing the beans down and filling up the 
interstices, to the fullest extent possible, a large number of 
additional beans was put in, so as to allow the straight edge to 
pass over the mouth again. And a quart measure was filled, 
heaping full, with .'No. 4 (turkey) shot; the straight edge 
passed over the mouth and by shaking and pressing the shot 
down, two hundred and fifty additional shot were put in. 
It was found that the straight edge could be passed over the 
mouth of the vessel in one direction without disturbing the 
contents, while it removed several shot or beans if the vessel 
was turned half around, and was passed over it again; and 
so again some shot or beans were removed by passing the 
straight edge over the vessel at other angles. These experi- 
ments clearly demonstrated that the word "filled" has no 
definite and unvarying meaning ; and when it is stated a vessel 
is "filled" with shot or beans, the public can not know how 
full it is. It all depends upon the extent to which the con- 
tents are pressed down and the interstices filled and the direc- 
tion in which the straight edge is passed over the vessel. 



154 Lotteries, Frauds and Obscenity in the Mails. 

So that it was decided that no unerring estimate could be 
made in this class of cases, except by counting the identical 
things named in the advertisement of the contests, and so long 
as there were even two chances to one against guessing cor- 
rectly, the scheme was a lottery, just as there would be a lot- 
tery, if only two tickets instead of a million were put in the 
wheel. 

If it be so doubtful whether the vessel contains 10,000 
or 10,001 that the most experienced person could not by his 
judgment determine which was the correct number, the chance 
element, pure and simple, would be present and the chance 
in that case would be of the same character as that which 
would inhere in a contest where the uncertain numbers 
amounted to hundreds or thousands, instead of two. The 
probabilities of guessing the correct number, in one case, 
would be greater than in the other but the chance, in its 
relation to gambling schemes, would be the same in both. 

But as the successive counts of the contents of the same 
vessels filled from the same lot of shot, beans, etc., showed 
a difference of considerably more than two, the Department 
felt doubly sure of its ground, especially when the operators 
persisted in advertising these schemes and the people with 
equal persistance continued to stake their money on the result 
of their guessing. Both promoters and adventurers have dis- 
covered, after many years of trial and experiment, that these 
guessing contests involve chance and that they open as wide a 
field for gambling, as do horse races, cards or regular lotteries. 

Sec. 134. Hudelson, in Hudelson, vs. State, 94 Ind. 
426 (48 Am. Rep. 171), was indicted for a violation of a 
Statute of Indiana, which prohibited the advertisement "of 
any lottery, gift concert or scheme of chance of any kind or 
discription by whatever name, style or title the same may be 
denominated or known. " In the scheme, he advertised, he 
offered a gold watch to the purchaser of fifty cents worth, or 
more, of goods from his stock, who guessed nearest to the num- 
ber of beans contained in a glass globe on exhibition in his win- 
dow, stating when the contest would begin and end. Hudel- 



Lotteries, Frauds and Obscenity in the Mails. 155 

son contended that the enterprise was not a lottery nor in 
the nature of a lottery or gift enterprise, on the ground, that 
to arrive at the correct number of beans in the glass globe was 
not a matter of chance but of a mathematical calculation. 
The court overruled this contention and held, that while an 
expert mathematician might compute the dimensions of the 
glass globe with a reasonable degree of certainty, yet the 
result could be but approximately correct. The exact thick- 
ness of the glass would have to be known and that could not be 
known simply by an observation of the sealed globe, and 
therefore, that would be an element of guessing. The court 
continued: "And if the exact size of the globe were known, 
it would be utterly impossible by the application of mathe- 
matical rules, or by any other means, to calculate the number 
of beans contained in it. The size of the several beans, so 
far as they could be observed, would be a matter of pure guess- 
ing. And besides only those on the surface and next to the 
glass could be seen. Those in the center might be smaller or 
larger. In short, there could be no fixed or definite fact or 
quantity upon which to base a mathematical calculation or 
demonstration. The number of beans in the globe could be 
nothing else than a matter of guessing. An expert mathema- 
tician might more nearly fix the size of the globe than an 
entirely uneducated person. And so he, and persons of better 
judgment, might more nearly fix the number of beans in the 
globe than persons of less judgment; yet the exact number 
would be a mere matter of guessing. That anyone should 
guess the correct number would be a matter of the merest 
chance, because there are no means of attaining to a cer- 
tainty!" 

There is no other American case, known to the writer, 
where the question in regard to this class of cases has been 
before the courts; but the question has been judicially de- 
termined in two cases in the province of Ontario and one in 
ISfew Brunswick. 

Sec. 135. In Kegina vs. Dodds, 4 Ont. Kep. 390, the 
defendant, being the proprietor of a newspaper, advertised in 



156 Lotteries, Frauds and Obscenity in the Mails. 

it that whoever should guess the number nearest to the number 
of beans which had been placed in a sealed glass jar in a 
window on a public street should receive a $20 gold piece, 
the person making the next nearest guess a set of harness, 
and the person making the third nearest guess a $5 gold piece, 
any person, desiring to bid, to buy a copy of the paper and 
to write his name and the supposed number of beans on a 
coupon to be cut out of the paper. 

The defendant was convicted by the Police Magistrate of 
the City of Toronto of being guilty of a contravention of the 
Lottery Act. The case was taken up on certiorari 
and the Queen's Bench Division of the High Court quashed 
the conviction, and held that as the approximation of the 
number depended as much upon the exercise of skill and 
judgment as upon chance this was not "a mode of chance" for 
the disposal of property within the meaning of the Act. 

In this case, the court said: "The articles (the beans) 
were exhibited visibly in a glass jar to all parties, and each 
person was to exercise his judgment as to the number. * * * 
It was a chance, no doubt, in a sense that it would be difficult 
to most minds to make a really near approximation to the 
truth, but others might, from training or turn of mind, or 
from accuracy of observation and facility of mental arith- 
metic, applied to the visible size and capacity of the vessel, 
make a more or less accurate estimate of the contents. A 
trained eye could fairly approximate the cubic contents of a 
mass of rock or earth to be excavated in an engineering opera- 
tion. The untrained would probably have to rest on the most 
baseless guess work or chance in fact." And the Chief Justice 
was disposed to think the result did not depend on chance. 
An associate judge held it depended on chance, and another 
judge concurred generally. 

Sec. 136. In Eegina vs. Jameson, 7 Ont. Reps. 149, it 
was shown that the defendant, who was a tailor, placed in his 
shop window a globular glass jar, securely sealed, containing 
a number of buttons of different sizes. He offered to the 
person who should guess the number nearest to the number 



Lotteries, Frauds and Obscenity in the Mails. 157 

v/± buttons in the jar a pony and cart, stipulating that the 
successful one should buy a certain amount of his goods. - 

This enterprising tailor was also convicted by the Police 
Magistrate of Toronto, but upon certiorari, the conviction was 
quashed, and it was held that as the approximation of the 
number of buttons depended upon the exercise of judgment, 
observation and mental effort, this was not a "mode of chance' ' 
for the disposal of property within the meaning of the Act. 

In this case, the court, the Queen's Bench Division, said : 
"The fallacy of the argument of the Crown seems to me to 
be that because the estimate may not be exact, it is therefore 
no estimate, but a mere chance method. The number to be 
ascertained is a certain definite and ascertainable fact. Noth- 
ing can remove it to the region of uncertainty. The opening 
of the jar and counting of the buttons will ascertain the fact. 
If a mistake is made in counting, the fact would still remain, 
and no one would say that a person, who, from habits of men- 
tal carelessness, frequently made mistakes in the counting, 
was ascertaining the number by a method of chance. The jar 
being closed, the fact that the buttons were of unequal sizes 
and different shapes renders the estimate less accurate and 
more difficult; nevertheless, it is an estimate, a calculation, an 
endeavor to ascertain the fact by mental process rendered 
more or less certain by a variety of circumstances." 

The court, disapproving of the principle laid down in 
Hudelson vs. State, 94 Ind. 426, added: 

"When the learned judge Zallors admits, that an expert 
mathematician might more nearly fix the size of the globe than 
an entirely uneducated person, and that he and persons of 
better judgment might more nearly fix the number of beans 
in the globe than persons of less judgment, it seems to me, 
with great deference, he concedes the case and removes the 
question from the region of chance to that of calculation." 

A majority of the court, having gone wrong in the first 
case, persisted in its error in this case and went still farther and 
asserted a doctrine that would eliminate the chance element 
from all transactions. The court says the number to be 



158 Lotteries, Frauds and Obscenity in the Mails. 

ascertained was a certain, definite and ascertained fact, and 
evidently regarded the chance, if any, as inhering in the event 
itself (that is the number of buttons in the jar) and not in the 
state of the knowledge of the guessers. Of course the number 
of buttons in the jar was definite and certain but the guessers 
did not know and could not know, in . advance, what that 
number was. 

Suppose that, after a drawing of the Louisiana Lottery, 
a prize should be offered to the person, who should guess the 
lucky number, would anyone contend that there was no chance 
in such a guess, simply because the lucky number had been 
drawn, was made certain and definite and was known to the 
promoters of the lottery? The court says, however, that an 
endeavor to ascertain the number of buttons in the jar, by 
mental process, "was rendered more or less certain by a variety 
of circumstances." Here it is conceded that the most intelligent 
guesser is in a region of doubt to a certain extent and that 
being the case his success must necessarily have depended upon 
mere luck or chance. It seems that the buttons, being of 
different sizes and shapes, made it utterly impossible for any 
one, by mental effort, to state exactly or proximately the 
number. But the view of the writer on contests of this kind 
fully appears in what is said above and in the comments on 
the opinion of Attorney-General Miller and on the case of 
Dunham vs. The St. Croix Soap Manufacturing Company, 
and what is said there need not be repeated here. 

In this case it may be noted that, while the fact does not 
appear in the report of the case, the guesses ran from 200 to 
50,000, showing that the exercise of judgment, observation 
and mental effort in different persons produced very different 
results. 

Sec. 137. In Dunham vs. St. Croix Mfg. Company, 34 
Reports of the Supreme Court of ~New Brunswick, 245, the 
defendant company offered a piano, worth $800 to "the correct 
or nearest correct guesser" as to the weight of a cake of Sur- 
prise soap. No charge was made for guessing but the ticket 
that the guesser received stated: "Keep this. You guess 



Lotteries, Frauds and Obscenity in the Mails. 159 

free of charge. You have this chance for a free guess, be- 
cause we want you to think about Surprise soap, to talk about 
it, to know it, to use it. * * * All we ask in return for 
the privilege of guessing is that you give Surprise soap a fair 
trial as a laundry soap." The ticket also stated that each per- 
son could guess once only each day and that in case two or 
more guessed the same weight the judges had "the right to 
decide the winner by lot in such manner as may appear to them 
to be the fairest to all concerned." The plaintiff's guess was 
483 pounds and 10 ounces, which she claimed was the nearest 
to the correct weight of the cake of soap, but for some reason 
not disclosed by the record the defendant company did not de- 
liver the piano to her and she brought suit claiming $800. 
The company demurred to the petition and for grounds of 
demurrer set up a want of consideration, and that the contract 
was illegal, as it involved the carrying on of a lottery. Mr. 
Justice Barker of the Supreme Court of New Brunswick held 
there was a consideration for the contract and that the scheme 
was not a lottery. As to the consideration, Mr. Justice Bar- 
ker, after stating that he expressed no opinion as to whether 
a guesser was required to give the soap a trial or not, said : 

"Apart from this, we think, in all such cases as this, where 
a person by public advertisement agrees, on the performance 
of any defined act or consideration, to pay a specific sum of 
money, he becomes bound, on notice by any one who in fact 
does the act or performs the condition, provided the act or con- 
sideration is not illegal. So in this case, if the defendants — 
no doubt having in view the publicity it would give their soap 
and the increased sale of it — choose to offer and agree to de- 
liver a* piano to any one person who, subject to conditions 
which they impose, shall guess or come nearest to guessing the 
precise weight of a block of their soap on public exhibition, 
they are bound to do so to any one who does so guess." 

As to the lottery feature of the scheme the learned Jus- 
tice said: 

"It is not a case of purchasing tickets, where it is simply 
a matter of chance, which ticket- wins. The person who 



160 Lotteries. Frauds and Obscenity in the Mails. 

guesses pays nothing for the chance of competing, and has 
nothing at risk. On the contrary, while as in all such cases 
the element of chance is not wanting; skill and judgment in 
a competition like this will almost inevitably win as against 
inexperience. The man with a knowledge of the weight of 
soap and a capacity for judging by the eye of the size of the 
block, and the knowledge from such data to judge of its weight 
will be much more likely to win in such a competition than 
one who has no such knowledge or capacity to aid him. Reg. 
v. Dodds (4 Out. E. 390); Reg. v. Jamieson (7 Ont. R. 149)." 

It is manifest the learned Justice simply followed the 
cases of Reg. vs. Dodds, and Reg. vs. Jamieson. He thought 
there was enough consideration moving from the plaintiff to 
support the contract, but the consideration necessary to make 
the scheme a lottery was wanting. He argued that the plain- 
tiff paid nothing and risked nothing. If she paid nothing and 
risked nothing, upon what ground, other than that of a wager, 
could she recover $800 from the defendant company? The 
fact is she did not earn that sum or anything like it, but the 
company orTered an $800 piano as the prize upon the ground 
that all of the competitors earn that much by way of advertis- 
ing Surprise soap. That the company's motives were mer- 
cenary is apparent from the very terms of the offer and the 
company evidently thought that there would be more than one 
competitor and that the benents,aecruing to the company from 
the offer and award of the prize, would be full compensation 
for it. It was just as much trouble and inconvenience for the 
competitors to guess wrong as right and the advantages accru- 
ing to the company were as great in one case as in the other. 
Hence all the competitors earned the prize and upon what 
ground, other than that of a wager, could the company deliver 
to one of them a prize earned by all? 

The learned' Justice thought that the element of chance 
was wanting in the scheme, because "skill and judgment in a 
competition like this will almost inevitably win as against in- 
experience" and that a man with a knowledge of the weight of 
soap and the capacity of judging by the eye of the size of a 



Lotteries, Frauds and Obscenity in the Mails. 161 

block will be much more likely to win in such a competition 
than one who has no such knowledge or capacity to aid him. 
The Justice did not say that a person of experience would cer- 
tainly win, but he simply said that he would more likely win 
than an inexperienced person. This virtually concedes that no 
one could unerringly state the exact weight of the soap and 
not being able to do that, no one could know whether he had 
won the prize, until after the soap had been weighed. Every 
one entering the contest would no doubt feel sure of his 
ground up to a certain weight, but every one, no matter what 
his knowledge and experience may be, would finally reach a 
point in his estimation of the weight of the cake of soap, where 
he would be conscious of having reached the field of specula- 
tion and of mere guessing ; that is to say, he would find cer- 
tain figures between which he would be unable to decide which 
to choose and the figure finally taken would be more the result 
of a whim or sentiment rather than of judgment. The plain- 
tiff in this case says she guessed the weight of the cake of soap 
to be 483 pounds and 10 ounces, but there is no question that 
if she had been asked why she took 10 ounces rather than 9 
or 11 or any other number of ounces or why she took 483 
pounds, rather than 482 or 484, she would not have been able 
to give an intelligent reason for it. Besides that she had the 
right to guess once every day for ten days and no doubt the 
ten guesses she made were different. The defendant com- 
pany recognized the inability of any one to state the correct 
weight of the soap, except by chance, in giving all competitors 
the right to make ten guesses and thus it recognized at least 
ten chances to one against a correct guess. 

The position assumed by the Justice seems to be that only 
one experienced person would enter the contest and all the 
other competitors would be inexperienced in regard to the 
weight of the soap. The terms of the contest were not so lim- 
ited and the probability is that all who entered the contest 
were experienced on this line or had the advice of friends 
and relatives who were experienced. But if two or more ex- 

11 



162 Lotteries, Frauds and Obscenity in the Mails. 

perienced persons entered the contest the scheme as to them 
was a lottery, unless both could unerringly state the exact 
weight of the soap, in which case the plan provided that the 
prize should be awarded to one of them by lot, which of course 
in that event, made it a lottery and as between the inexperi- 
enced competitors there was chance. This scheme which was 
a gift enterprise undoubtedly appealed to the gambling spirit 
and held out the hope to the public of getting something for 
nothing or almost nothing. 

Sec. 137a. The Department has held that a prize 
offered to the party who would guess the number or nearest 
the number of seeds in a watermelon or pumpkin depended on 
chance. In such a case there are absolutely no data upon 
which even an experienced person can rely for success. 

HORSE RACES AS THE BASIS FOR LOTTERY SCHEMES. 

Sec. 138. In Allport vs. ISTutt, 1 C. B. 974, plaintiff 
sued for £100, having subscribed £1 to an adventure on the 
terms that in a certain horse race, the names of the horses 
should be put on separate cards and be mixed in a box and the 
names of the subscribers should also be written on separate 
cards and mixed in another box. One card was drawn out of 
the horse box and then one out of the other. The person 
whose name was drawn out after the horse, which should af- 
terwards win the race, should have £100. The defendant 
contended that the transaction amounted to a lottery, or in the 
alternative to a wager under the Statute of Anne and for that 
reason the plaintiff could not recover. On behalf of plaintiff 
it was argued that a lottery to be determined by a legal horse 
race was not prohibited and the transaction in question was 
nothing more than betting on a legal horse race. The court 
held that the transaction was a lottery, and that the words "all 
other lotteries' 7 used in the statutes were broad enough to take 
in the case, thus embracing what are commonly known as 
sweepstakes. 

Sec. 139. This case was followed in Oatty vs.Field, 9 Q.B. 
431, where the same methods were adopted to determine the 



Lotteries, Frauds and Obscenity in the Mails. 163 

winner of the prize. The courts do not indicate where in these 
schemes the chance element was found; but in view of other 
English cases it may be inferred that the decisions were based 
on the theory that chance inhered in the selection of the horses 
and not in the outcome of the races, and yet if that theory had 
been presented to the competitors, no doubt they would have 
rejected it, as not being in their contemplation, at the time 
they deposited their money. If there was no chance in the 
outcome of the races, then the contest could have been and 
ought to have been determined, as soon as the drawing of the 
horses was concluded, for in that event each competitor should 
have known which horse would win, before the race came off. 
The fact, however, no doubt, was that the competitors could 
not have agreed before the races came off, who should have 
the prize, and if an attempt had been made to hand the prize 
over to one of the parties on the ground that the outcome of 
the races, depending alone on the speed of the horses and not 
on chance, could be as unerringly determined before the races 
were run, as afterwards, there would have been a vigorous and 
effective remonstrance against such a course. The compet- 
itors undoubtedly staked their money on the outcome of the 
races, and not on the selection of the horses. The fact that 
they left the selection of their respective horses to chance indi- 
cates very clearly and unmistakably that there was no choice 
among the horses, so far as the foresight and judgment of the 
competitors could determine, and hence, they were willing to 
stake and did stake their money on the horses that the lot 
awarded to them respectively and they made the prize depend- 
ent on the chance which they recognized as inhering in the out- 
come *bf the races alone. The outcome of the races did not 
depend on chance, for there is no chance anywhere in the uni- 
verse but to the competitors, in their then state of ignorance 
as to "the emergence of the event," there was in fact chance 
and when they staked their money they in common parlance 
"took their chances" to receive a prize, to be awarded to the 
person, whose name should be drawn out after the horse that 
should' win the race. 



164 Lotteries, Frauds and Obscenity in the Mails. 

In Tollett vs. Thomas, L. E. 6 Q. B. 514, the Queen's 
Bench propounded bnt did not answer the question whether 
the outcome of a horse race depends on chance or not but dis- 
posed of the case on another ground. In Caminada vs. Hul- 
ton, 60 L. J. M. C. O. K S. 116, and Stoddard vs. Segar, 2 
Q. B. 474, the courts held that horse races did not depend on 
chance. In both cases the courts laid stress on the fact that the 
competitors had the right to choose the horses on which they 
staked their money. In Stoddard vs. Segar, the court 
held that there was no chance in the scheme though the 
winner was required to name four of the fastest horses. 
But if a party can unerringly name one, he could with equal 
certainty name four or state the order in which all the horses 
would come in. And if one bettor can name the win- 
ning horse, why can not all the bettors, of equal intelli- 
gence name the winner ? It is a well known fact that 
professional gamblers habitually bet on different horses. 
If staking money on an event is a test whether a gambling 
chance inheres in that event or not, then a horse race 
has the element of chance in it, because probably more 
money is lost and won on horse races during the racing season 
by the gambling fraternity and the public too, than, with few 
exceptions, on anything else. It is too well known that it is 
the chance element in the racing of horses that makes the race 
course such an attractive place for those who gamble, and if 
they could unerringly name the winning horses, betting on 
horse races would be as senseless as "betting on the rising of 
the sun, or the succession of the seasons." The chance ele- 
ment in these cases relates solely to the ignorance of the com- 
petitors as to the outcome, and they invest their money on 
account of this ignorance and nothing else. This is the doc- 
trine laid down in the Lovell case, 39 ~N. J. L. 458, and it is 
unquestionably the correct doctrine. The court there said the 
physical condition of the horses and their riders, the fastenings 
of their shoes, the honesty of purpose, that actuates the riders 
and their owners in running them, are all matters about which 
the judgment of the outside bettor can avail him no more, than 



Lotteries, Frauds and Obscenity in the Mails. 165 

the arithmatical calculation of chances can avail the dice 
thrower. 

Sec. l-AO. In Caminada vs. Hulton, 60 L. J. (M. C.) 
1ST. S. 116 (1891), the proprietor of a sporting newspaper of- 
fered a prize to the party, who would name six, five or four 
winning horses in a given race. It was held that this was 
neither a bet nor a lottery. 

Day, J., said: "I am clearly of the opinion that this can 
in no possible sense be deemed a lottery within the meaning 
of the Lottery Act. There is no contrivance or device to ob- 
tain money, by chance, or by anything analogous to chance, 
and in my judgment what is done here nowhere approaches 
the description of a lotttery. It is far removed from the scope 
of the Lottery Act and I can not see the possibility of any rea- 
sonable argument being presented to show that this was a 
lottery or within the mischief of the Lottery Act. The other 
ground, namely, that it was betting, is more suggestive. It 
might be said, although established with difficulty, that this 
was a bet on the ground that a person has paid a penny by way 
of backing six horses to win six particular races ; but when one 
comes to consider more carefully what the nature of the trans- 
action is, even that absurd notion of a bet would not be appli- 
cable. Clearly it is not a bet at all. 

Any person who gets hold of one of these pieces of paper 
becomes entitled to get a prize of a large sum of money in the 
event of his succeeding in guessing the names of the winners 
of the six particular races; it is really not a bet; it is a scheme — 
a device — for the purpose no doubt of furthering the business, 
which the respondent carries on, enabling him to sell this han- 
dicap book or Racing Record, with which these tickets or cou- 
pons are issued." 

Sec. 141. In Stoddard vs. Segar, 2 Q. B. Law Reps. 474, 
the defendants published a newspaper and offered a prize of 
£100 to the purchaser of the paper who would name 1, 2, 3 
and 4 winning horses in a horse race. They were prosecuted 
for a violation of the Lottery Acts, and Betting Acts of 1853, 
prohibiting the opening and using of an office for the purpose 



166 Lotteries, Frauds and Obscenity in the Mails. 

of receiving money as the consideration for an undertaking to 
pay money on events or contingencies relating to horse races 
or receiving moneys or deposits on bets on condition of paying 
£100 on the happening of events and contingencies relating 
to horse races; and also for violating the Betting Act of 1874, 
forbidding the advertisement of bets and wagers on horse 
races. Wight, J., and Pollock, B., held that this scheme was 
neither a lottery nor betting, following Caminada vs. Hulton, 
60 L. J. 9 (M .C.) 116. 

The difference between this case and Caminada vs. Hul- 
ton, is that in the former the competitor was required to name 
four winning horses in the order in which they would pass the 
poles, while in the latter he was required to name six, five or 
foi»r winning horses without giving the order of their fleet- 
n ess. The chance of winning was the same in each case but 
the probabilities of winning were different. 

The number of horses entered for the races in these cases 
is not given but suppose for illustration that twelve were en- 
tered in each, and suppose the horses were so equally matched 
that men of ordinary intelligence and with equal knowledge 
in respect of the races would select different ones; then in the 
case of Caminada vs. Hulton, the odds against the competitor 
naming six winning horses would be 924 to 1; against his nam- 
ing &ve would be 792 to 1, and against his naming four would 
be 495 to 1. On the other hand, in the case of Stoddard vs. 
Segar the odds against the competitor naming four winning 
horses in the order in which they would win would be 11,880 
to 1. These results are reached by the rules given in Cham- 
bers and Brittanica Encyclopaedias under the title "Probabil- 
ity." In the case of Caminada vs. Hulton the chances or 
probabilities of naming six winning horses out of twelve, with- 
out regard to the order in which they would win, would be 
A x A x A x l x f x l or e 6 7 5 2 2°s o or 9^4 or 1 chance in 924 ; the chances o f 
naming five winning horses would "be j^x-j^-x-j^xfxjj or -g^iffo or T92 or 1 
chance in 792; and the chances of naming four horses would be rVx^-x 
-Axi or -n^A-n or A- or 1 chance in 495. 



Lotteries, Frauds and Obscenity in the Mails. 167 

In naming the six horses out of twelve the com- 
petitor would have six chances out of twelve of naming the 
first horse, five chances out of eleven of naming the second, 
and so on for the others. In the case of Stoddard vs. Segar, 
the competitor would have one chance in twelve to name the 
first horse in the order it would win, one chance in eleven to 
name the second horse in its order, one chance in ten to name 
the third and one chance in nine to name the fourth or one 
chance in 11,880 to name all four in their order. 

Sec. 142. In People vs. Keilly, 50 Mich. 384, the de- 
fendant was found guilty by the trial court of selling pools on 
horse races and selling checks on baseball matches, where 
those, who bet on the winning combinations, received the pool. 
The defendant had nothing to do with the races or matches. 
The Court held that he was not guilty of conducting a lottery 
basing its conclusion on the Statute of Michigan, making a 
distinction between betting and lottery. The Court said, how- 
ever, that the defendant was guilty of a species of gambling. 
The Court also seemed to think that in a lottery a large sum of 
money must be involved and a great number of people en- 
gaged. There is no discussion of the difference between ordi- 
nary gambling and a lottery. 

The Constitution of Michigan of 1835 prohibited lotter- 
ies entirely, and in 1867 (1 Sess. Laws 1867, p. 122), the stat- 
ute in regard to lotteries was amended by inserting after the 
word "lotteries" the words "gift enteiprises." The Court 
said: "This change was no doubt introduced from a doubt 
whether gift enterprises, which were then becoming numer- 
ous, belonged strictly to the class of lotteries because, in some 
respects, conducted in different ways although reaching similar 
results. 

Sec. 143. In re Dwyer, 35 K Y. S. 884, it was held by 
Gay nor, Judge, that a horse race, the winner of which was to 
receive a certain stake, to be made up from entrance fees paid 
by the owners of the contesting horses and an additional sum 
to be added by the manager of the race, if the entrance fees 
were not sufficient, was not a lottery. Dwyer was the presi- 



168 Lotteries, Frauds and Obscenity in the Mails. 

dent of the Brooklyn Jockey Club, an association formed un- 
'der the laws of the State of New York for the incorporation 
of associations for improving the breed of horses. Acting for 
the association Dwyer advertised a horse race to be run on the 
association's grounds in Brooklyn on May 15, 1894. The race 
was open to all thoroughbred horses, three years old and up- 
wards, but in order to run, horses had to be entered on the 
books of the association and an entry fee of $250 was charged, 
part of which was refunded, in case the horse was withdrawn 
before the race. The race was to be for a stake of $25,000, 
of which $18,000 was to be given to the winner, $5,000 to the 
second horse and $2,000 to the third. Judge G-aynor said this 
was not a lottery, either in common speech or within legal 
definition; that "a lottery depends on lot or chance, such as 
casting of lots, throwing of dice or turning of a wheel." It 
was argued that in that case horse owners did not pay a sum of 
money to win a larger sum by lot or chance but in order to 
enter into the contest of skill, endurance and speed, upon 
which the stake depended. The judge then goes on to show 
that, from the earliest times in New York there had existed 
two distinct lines of legislation on two distinct subjects, one 
being raffles and lotteries and the other betting and gaming, 
and that the statutes in the one system did not create and cover 
offenses in the other and horse racing was covered by the stat- 
utes against betting and gaming and not by the lottery stat- 
utes. By the laws of New York the operation of the statute 
against "all racing or trial of speed between horses or other 
animals for any bet, stake or reward/' was suspended during 
30 days in each year on the grounds of the association, of 
which Dwyer was president, and all like associations and the 
day of the race in question was one of those days. The Court 
made no effort to place the decision on the ground that the 
transaction was not gambling but placed it upon the ground 
that the prize offered was simply intended by the association 
to encourage the raising of the best breed of horses. The 
only intimation of such a proposition we get from the opinion 
is the opening statement that "the two recent decisions in civil 



Lotteries, Frauds and Obscenity in the Mails. 169 

cases cited on the argument scarcely apply." The two cases 
referred to must have been Irving vs. Britton, 28 X. Y. S. 
529, and Luddington vs. Dudley, 30 K Y. S. 221. In the 
first of these cases the contest was in regard to a note given by 
defendant, partly for an interest in a pool and partly for a bet 
with the book-maker at a horse race. The scheme was that 
the total amount invested on the different horses, less the com- 
mission of the person conducting the pool, was divided in equal 
sums and was paid to the persons having selected cards, tickets 
or receipts on the winning horse; and it was distinctly held 
that the process of the pool was "in every essential a lottery." 
Judge Pryor said it was a scheme for the distribution of prop- 
erty by chance and that the event of a race is a contingency 
dependent upon chance is a self-evident proposition, citing 1 
Edmonds St. at Large, 614, S. 8. He thought that if the re- 
sult of a horse race was susceptible of infallible anticipation, 
betting thereon would be as senseless and futile as upon the 
rising of the sun or the succession of the seasons, and that it 
was the element of chance and the uncertainty of the event 
alone that stimulated and supported the wagers of the com- 
peting bettors. The judge cites among other cases State vs. 
Lovell, 39 K J. L. 458, and Tollett vs. Thomas, L. E. 6 Q. B. 
514. The Court said nothing about the chance element in- 
hering in the scheme on the ground that the amount the win- 
ners received depended on chance. In Luddington vs. Dud- 
ley, supra, the Court simply followed the principles laid down 
in Irving vs. Britton. 

Sec, 144. In Keiley vs. Gray, 28 K Y. S. 811, the Su- 
preme Court of ]S T ew York, at General Term, held that pool 
selling on horse races was not a lottery within the meaning of 
the ISTew York Statutes but that the same constituted betting 
as contradistinguished from lottery gambling but this distinc- 
tion was made in view of the legislation of that State on the 
subjects of lotteries and ordinary gaming. Judge Merwin, 
delivering the opinion of the court, speaking of the difference 
between lottery and ordinary gambling, said: "They are dis- 
tinct subjects on the statute books and in the public mind and 



170 Lotteries, Frauds and Obscenity in the Mails. 

if the design had been to cover both, they would have been 
named. It is not enough to say that they both involve, to 
some extent, the same kind of evil. It may be difficult to pre- 
cisely define the difference between the two. It may be said, 
as in People vs. Elliott, 74 Mich. 264, that in betting there is 
an opportunity for the exercise of reason and judgment while 
in a lottery there is no such opportunity. It may be said that 
betting is not a distribution of property, but an agreement to 
pay the winner certain sums in a certain contingency or that 
the winner shall have certain sums which are deposited as 
stakes. But the distinction whatever it may be, it is very clear 
from the state of the statutory law in 1846 as well as in 1821, 
that betting upon a horse race was not then understood to be 
a lottery. That being so, we must hold that it was not meant 
to be included, in the term lottery as used in the constitution. 
The same rule must apply to the pool selling complained of,- 
as it must be classed with betting, and is a development — a 
combination — in the same line." 

Sec. 145. In People ex rel. Lawrence vs. Fallon, 152 
N. Y. 12, it appeared that the relator was an officer of the 
Westchester Racing Association, which was organized under 
chapter 570 of the Laws of 1895 of New York. He, to- 
gether with other officers of the association, announced and 
advertised the intention to hold a meeting for races on its 
grounds and offered prizes or premiums to be competed for at a 
time named. Owners of horses were permitted to enter them 
for the races, by paying an entrance fee, which became the 
property of the association, was paid into its treasury and be- 
came a part of its general assets. The premiums or stakes 
offered by the association, were for a definite sum without re- 
gard to the amount of the entrance fees received and were 
payable out of its general funds. The Court of Appeals of 
New York held that this was not a lottery, chiefly on the 
ground that the constitution and laws of New York had always 
made a distinction between racing horses for prizes and lotter- 
ies, but also apparently on the ground that the word "lottery"' 
in that state did not include "a test of speed or endurance of 



Lotteries, Frauds and Obscenity in the Mails. 171 

horses for prizes or premiums." The Court held also that the 
transaction was not gambling, saying: "There is a plain and 
obvious distinction between a race for a prize or premium, con- 
tributed in that manner and a race where the stake is contrib- 
uted by participants alone, and the successful contestant is to 
have the fund thus created. The latter is a race for a mere 
bet or wager, while the former is for a prize offered by one not 
a party to the contest," citing Harris vs. White, 81 1ST. Y. 532. 

Sec. 146. So likewise the Postoffice Department has 
held that a prize offered to the party who would give the order 
in which the baseball teams would stand at the end of the sea- 
son was a lottery scheme, and so also was a prize to be given to 
the party who would name the champion, the number of sec- 
onds of each round, the number of rounds and the number of 
the round with the number of the seconds in the round which 
would terminate the prize fight between Fitzsimmons and 
Corbett. 

That prize fight proves very clearly that there is chance 
in such contests and that reason has nothing to do with or at 
least has not a controlling influence over the result for the odds 
among the gambling fraternity were laid on Corbett and yet 
Fitzsimmons was an easy winner. 

None of these, however, is ordinarily made the basis of 
lottery gambling simply because the chances. are not numerous 
enough to justify it. A prize offered to the party naming 
the fastest horse in a race where the horses entered do not ex- 
ceed probably a half dozen or a prize to the party naming the 
winning baseball team out of a possible ten or fifteen or a prize 
to the party naming the successful candidate for president 
out of two or three would be too hazardous for anyone, as too 
many would win the prize to make it profitable to the pro- 
moter. Hence the promoters adopt methods that shift the 
risks from themselves to the adventurers. They do this by 
inviting the adventurers to contribute to a pool which is to be 
divided equally among those who comply with the conditions. 
Thus we find promoters advertising pools upon horse races, 



172 Lotteries, Frauds and Obscenity in the Mails. 

baseball matches, prize fights, chess contests, and guessing con- 
tests. 

BOND INVESTMENT COMPANIES. 

Sec. 147. The course of the decisions in the United 
States and the rulings of the Departments at Washington in 
regard to Bond Investment Companies, so-called, with the ex- 
ception of Union Investment Ass'n vs. Lutz, which will be 
noticed hereafter, has been constant and uniform, that the 
schemes they operate constitute lotteries or similar enterprises. 

The history of the rise and progress of these companies 
in this country forms one of the most humiliating as well as 
surprising chapters in our annals. They made their appear- 
ance, first, about ten years ago in Massachusetts and New 
Hampshire, where three hundred companies of this class were 
put in operation. These companies, which were known by the 
name of endowment orders, issued bonds, payable absolutely 
at the end of a fixed period, but the plan of business provided 
that the bonds would be redeemed in numerical order from 
time to time, so far as the funds would extend, but they did not 
contain the multiple principle of redemption, which became 
such a prominent feature in their later development. The 
Insurance Commissioner of Massachusetts denounced these 
schemes in his report in 1891 and the legislature of that State 
in that year passed a law declaring that the "issuing of 
bonds, certificates, or obligations to be redeemed in numerical 
order of precedence or in an arbitary manner, without refer- 
ence to the amount previously paid thereon by the holder, is 
hereby prohibited." (Acts 1891, p. 231). In his report in 
1893 the Insurance Commissioner said: "'During their brief 
existence the fifty-six Massachusetts corporations of this class 
gathered a membership of 364,000, and collected from the 
certificate holders over $12,500,000. From this sum less than 
9 per cent of the membership received in payment of the 
earlier matured certificates over $3,000,000, while above 
$2,000,000 was paid in claims for sickness, a large proportion 
of this to certificate holders in excess of their contributions. 



Lotteries, Frauds and Obscenity in the Mails. 173 

and with the natural result of the immediate disappearance 
of these enriched members from the rolls at the cost of those 
remaining. Nearly $4,000,000 — one-half undeniably if not 
undisguisedly a steal — went into the pockets of the promoters 
and officers as 'expenses/ leaving at the end only about 
$3,500,000 for distribution to the remnant of 330,000 mem- 
bers, only a trifle more than was gobbled by the 30,000 who 
got in "on the ground floor," which list, of course, included 
all of the 'supremes,' their 'sisters, cousins, and aunts.' 
The total amount of the obligations upon the certificates issued 
by these corporations in exemplifying their wonderful mew 
system of finance' for the benefit of the poor people, and 
toward meeting which a paltry $8,800,000 was altogether 
collected, was nearly $120,000,000. It is doubtful if the 
world's history, whether in the South Sea bubble, the Dutch 
Tulip Mania, or the Mississippi scheme, presents a parallel to 
the ghost dance in which the people were led by this wild and 
foundationless gambling infatuation." 

The Insurance Commissioner of New Hampshire, in his 
report in 1891, said: "Here is one of the secrets of the craze 
to enter the endowment orders — the hope of realizing the sum 
stated, for the amount invested. Inducements of this kind 
were, as a rule, the most potent arguments, for, among the 
unthinking, the prospect of receiving, in a year, the sum of 
$100 in return for $30, $40 or $50, or $1,000 in ten years 
from an investment of $268, was too tempting a bait to pass 
by unheeded, especially when men of prominence were found 
on the official roster. * ■ ' * . * , 

Now, if there is anything in this world, except death, 
more uncertain than the terms of the contract between the 
various orders lately at work in New Hampshire and their 
certificate holders, it has yet to be discovered. 

The element of chance, in one form or another, enters 
into all of them. The assets of each order are the promises 
of the certificate holders, and these promises are, as a rule, 
worth just the paper they are written upon and payable when 
the member thinks it is for his or her interest. Tempting 



174 Lotteries, Frauds and Obscenity in the Mails. 

offers are made to all to enter by the front door, and once their 
admission fees are paid, and several assessments collected, no 
objection is made to their departure by the back door, for this 
is part of the programme — the lapse chance of the order — an- 
other of the 'uncertain events' whose frequent occurrence, at 
stated intervals, brings joy to the persisting members. An 
increase of new members brings cash to the pockets of the 
organizers, and a decrease in the number of the old ones leaves 
money for the certificate holders. With a knowledge of these 
schemes, derived from a patient study of their by-laws and 
statements, words are inadequate to express the indignation 
which any honest man must feel at the heartless character of 
the whole business, and the demoralizing effect on those who 
have been induced by delusive promises to join it." 

In 1891 the New Hampshire legislature was induced to 
pass a law, known as the a Barber Law," putting all these con- 
cerns under the supervision of the Insurance Department, 
which refused to grant them the privilege of doing business 
in that State and in one year thereafter they were all out of 
business. In 1892 the Commissioner used this emphatic 
language in his report. "A more scandalous chapter in New 
England history has never been written, for from the begin- 
ning to the end it is a story of deception, corruption, and 
fraud — a record that cries to heaven for vengeance, for it was 
a downright robbery of a class that is the hardest worked and 
the poorest paid in any community, the working men and 
women. The amount taken from this source in New Hamp- 
shire will never be known. A mixed feeling of shame and 
pride prevents those who have been duped from disclosing 
their loss, but an opinion of the amount can be formed from 
the figures given by the insurance commissioner of Massachu- 
setts of the sums, collected in that State." 

Sec. 148. These chemes, being suppressed in the land of 
their birth, sprang up in other sections of the Country and 
from 1892 to 1896 became a craze and hundreds of com- 
panies remorsely fleeced the people. The plans of operation 
were varied and ingenious. The monthly contributions 



Lotteries, Frauds and Obscenity in the Mails. 175 

ranged from ten cents to five dollars and the bonds, certificates 
or coupons, were redeemed in numerical order or by the multi- 
ple or numerical system and in some instances by other 
methods, which will appear later on; and the profits, paid to 
the holders of lucky numbers, ranged from interest, on the 
amount invested, at the rate of ten per cent per annum, to 
over three thousand per cent, not per year but absolutely, or 
more than thirty dollars for one. These schemes were brought 
to the attention of the Postoffice Department at Washington 
in the early part of 1893 and, upon examination, they were 
held to be lotteries or similar enterprises "offering prizes de- 
pendent upon lot or chance," and their promoters were denied 
the use of the money order and register systems of the postal 
establishment, the law, at that time, not authorizing an inter- 
ference with their ordinary mail matter under seal. 

Sec. 149. These schemes opened such a rich field for 
money making that some of the shrewdest and most expert 
business men and actuaries, and some of the most talented 
lawyers in our Country became promoters of them, and they 
were pushed with all the energy and adroitness that brains, 
education and experience could supply. Their promoters were 
consistent and persistent in season and out, before the courts 
and the Departments at Washington, for three or four years, 
in their claim that the prize and chance elements of a lottery 
could not be found in these schemes; but the Postoffice Depart- 
ment was as equally consistent and persistent in ruling that 
the plans of business of the companies, operating the schemes, 
had all the essential elements of a lottery in them, and in 
denying their promoters the use of the mails, so far as the pay- 
ment of money orders and the registration of letters were 
concerned, until the passage of the Act of March 2, 1895, 
after which they were denied the use of the mails altogether. 

Sec. 150. In the early part of 1894 the president of the 
Provident Bond and Investment Company, being dissatisfied 
with the ruling of the Department with regard to the scheme 
operated by the company, induced the Postmaster-General to 
submit the question for an opinion to General Olney, then the 



176 Lotteries, Frauds and Obscenity in the Mails. 

Attorney-General of the United States. The company issued 
bonds to its patrons in numerical order, and redeemed them in 
the order of 1, 6, 11, 16, 21, 26, etc., using the numeral 5 
to determine the order of maturity, and paying 100 per cent 
profit on the investment during the first year and increasing 
the profits each succeeding year and on March 19, 1894, 
General Olney, in an opinion given that day, 20 Opp. Att'y 
Gen. 748, sustained the Postoffice Department in every detail. 
On April 4, 1894, the Attorney-General (General Olney) 
in an opinion given that day (21 Op. Att'y Gen. 4), held the 
scheme operated by the Tontine Savings Association of Min- 
neapolis, Minnesota, to be a lottery. The plan of business of 
this Association is given hereafter. (Sec. 153.) 

Sec. 151. In the Tall of 1895 the Pettis County Bond 
and Investment Company of Sedalia, Mo., The Tontine Sav- 
ings Association of Minneapolis, Minnesota, The Columbia 
Investment Company of Cincinnati, Ohio, The National In- 
vestment Company of Cincinnati, Ohio, The National Invest- 
ment Company of Washington D. C. and the Southern Mutual 
Investment Company of Lexington, Kentucky, applied to 
Postmaster-General "Wilson to revoke the "fraud orders," 
theretofore issued against them respectively. 

The Pettis County Company issued bonds to its patrons, 
in numerical order, for $1,000 each, payable on or before 
twenty years from date, each bond having attached to it four 
coupons, which were numbered from one, up. Each member 
was required to pay an initiation fee of $10 and monthly dues 
of $3. Nine dollars of the initiation fee and eight and one- 
third per cent of the monthly dues were set apart as an expense 
fund, one dollar of the initiation fee and fifty per cent of the 
monthly dues constituted a reserve fund, which was to be put 
at interest, and forty-one and two-thirds per cent of the dues 
went into a so-called trust fund for the redemption of bonds 
monthly. The order of redemption of the coupons was 1, 4, 2, 
8, 3, 12, 16, 5, 20, and so on until the multiple, 5, extended be- 
yond the number of coupons sold and then the coupons were re- 
deemed in numerical order until, by additional sales of bonds. 



Lotteries, Frauds and Obscenity in the Mails. 177 

the suspended multiple could be used, when the redemption 
would proceed as in the beginning. By this scheme it must be 
observed that the order of redemption of bonds is what might 
be termed a double numerical order. The coupons of each 
bond had at least one multiple (4), and three numerals, so 
that it may be safely stated that the bonds were reached and 
paid in numerical order. According to this scheme the 
member holding bond No. 1 would receive $1,000, while one 
other member would get $250 and all the rest nothing. When 
bond No. 1 was redeemed, bond No. 2, one coupon of which 
had already been redeemed, became the lowest number and 
its holder would get the balance of his $1,000, while seven 
other coupons were being paid. Then No. 3 became the 
lowest bond and its holder would receive the money repre- 
sented by all its coupons, while seven coupons of other mem- 
bers were being paid and so on for every succeeding bond. 
If a member failed to pay his dues before the expiration of 
three years he forfeited all he had previously paid. 

Sec. 152. The National Investment Company of "Wash- 
ington City, D. C, issued bonds of $1,000 each, in numerical 
order. The initiation fee was $4 and the monthly dues $4. 
The maturity fund consisted of twenty-five, the reserve fund 
of sixty-two and one-half and the expense fund of twelve and 
one-half per cent of the monthly dues. The bonds were made 
payable ten years after date but were subject to redemption 
monthly out of the maturity fund on hand each month in the 
order of 1, 5, 25; 2, 10, 50; 3, 15, 75; 3, 20, 100; 6, 30, 125; 
and so on, the company resorting to the numerical order and 
using the multiple 5 and the numerical 25 in each group of 
three redemptions, until the multiple 5 extended beyond the 
number of the bonds issued, when the payments reverted back 
and were continued as before. The bonds, which were not 
paid in ten years, were, after that period, redeemed in num- 
erical order. The holders of bonds, that were reached and 
paid before the expiration of ten years, received the par value 
of their bonds, less the monthly instalments of the ten years, 

12 



178 Lotteries, Frauds and Obscenity in the Mails. 

remaining unpaid at the time the redemption occurred. In 
other words the monthly dues for ten years amounted to $480 
and the initiation fee to $4, making $484 which the invester 
was required to pay. This sum, being deducted from $1,000, 
the par value of the bond, left $516, as the amount of the profit 
to each member, receiving payment. This profit was paid at the 
end of each month, as each member, whose bond was redeemed, 
got this sum, and in addition thereto the initiation fee and the 
monthly dues, paid up to the time of redemption. Thus at 
the end of one month he got $516-f-8=$524; at the end of 
two months $516+12=$528 ; at the end of three months 
$516-|-16=$532 and so on for one hundred and twenty 
months. A member, whose bond was redeemed at the end 
of the first month, had paid $8 and he received $524, thus 
realizing $65 for one in one month, while the member, whose 
bond was paid at the end of ten years, had paid $484 and 
received $1,000, which was a little more than $2 to $1 after 
waiting that length of time. But these enormous profits, 
which the lucky holders of bonds received, made it necessary 
that the unlucky members should lose even the principal sums 
they invested. 

The company also issued bonds for $500 which were 
matured and paid in precisely the same way as in the other 
series, the dues and profits being one-half of the sums given 
above. 

Sec. 153. The Tontine Savings Association, which is the 
same concern, whose scheme was held to be a lottery by Gen- 
eral Olney, issued numbered bonds to its patrons, in numerical 
order, for $1,500 each, payable on or before forty years after 
date. Each bond had three coupons of $500 each attached, 
which were numbered from 1, up. An initiation fee of $15 
was collected, which went wholly to the expense fund. The 
monthly dues were' $3, twelve and one-half per cent of which 
went to an expense fund, thirty-seven and one-half per cent 
to a reserve fund and fifty per cent to a maturing fund. Out 
of the maturing fund coupons were redeemed monthly in the 
order of 1, 3, 2, 6, 9, 4, 12, and so on, using the multiple 3. 



Lotteries, Frauds and Obscenity in the Mails. 179 

A member failing to pay his dues before the end of five years 
forfeited all he had previously paid. Here as in the Pettis 
County scheme each bond had a multiple coupon and two nu- 
meral coupons so that the bonds were in fact reached and par- 
tially paid in double numerical order. According to this plan 
if a member received payment of his bond at the end of the 
first month he would have paid $18 and would have received 
$1,500, making a profit of $1,482, but if his bond ran for 
twenty years he would have paid $1,440 and would have, 
received $1,500, making a profit of only $60, and the profits 
for the intermediate periods would have been unequal, the 
profits decreasing as the monthly payments increased. 

Sec. 154. The National Investment Company, of Cin- 
cinnati, issued three classes of certificates, denominated A, B 
and C. The certificates in class A were for $1,000 each, in 
class B for $500 and class C for $250. In class A the premium 
fee was $10 and the monthly dues $5; in class B the premium 
fee was $5 and the monthly dues $2.50 and in class C the 
premium fee was $2.50 and the monthly dues $1.25. The 
expense fund consisted of the premium fees and twenty per 
cent of the monthly dues; and the balance of the monthly 
dues was divided into reserve, investment and guarantee 
funds. The certificates in each class were issued in series of 
200. The funds of each series were kept separate and out of 
the investment fund certificates in the lowest series were paid 
monthly in numerical order to the extent of that fund then on 
hand. Then, next month, the company did not begin where it 
left ofi the previous month, but began at the lowest number in 
force in the next series and proceeded till the investment fund 
for that month was exhausted and so on until all the outstand- 
ing series were reached, when the redemption reverted to the 
lowest unredeemed certificate in the first series and so on 
again through the series. A table of redemption values was 
printed on the back of each certificate, which showed that the 
holder, whose certificate was redeemed at the end of the third 
month made a profit of 100 per cent and after the third month 
one per cent was added to the profits each month up to the 



180 Lotteries, Frauds and Obscenity in the Mails. 

seventy-third month, the per cent of profit for that month 
being 170. By this table the lucky holders of certificates re- 
ceived 100 per cent profit in three months, while those whose 
certificates were not paid till the end of the seventy-third 
month made only 170 per cent profit in six years, and of 
course the great army of unlucky members got nothing. The 
many lost all in order for the few to realize enormous gains. 
Sec. 155. The Columbia Investment Company of Cin- 
cinnati issued bonds in two classes, A and B. In class A the 
bond was for $1,000, the initiation fee was $10 and the 
monthly dues $5; and in class B for half these amounts. 
Twelve and a half per cent of the monthly dues was set apart 
for an expense fund, sixty-two and a half as a redemption fund 
and twenty-five as a reserve fund. Bonds matured when the 
net monthly payments to the redemption fund together with 
the pro rata of their reserve credits equaled their face value; 
but they were redeemed before maturity, after three monthly 
instalments had been paid, the order of redemption to be 
determined in that case by taking one per cent (less fractions) 
of the bonds in force on the first day of the month next pre- 
ceding such redemption and the number thus obtained was 
used as a numeral to determine the order of maturity. Thus, 
if the number of the bonds in force on the first day of a given 
month be 1,500, the numeral would be 15, that being one 
per cent of 1,500. Then the first bond to be redeemed would 
be 1, then 15, then 30, and so on, until the end of the list of 
outstanding bonds was reached, when the company reverted 
to the lowest unpaid bond and then proceeded in the same 
way. The numeral for each month might be and probably 
was different for each month. The plan, also, provided that 
when the reserve fund reached the sum of $50,000 the in- 
terest earnings thereon, less expense of managing the fund, 
might be applied to the payment of bonds in numerical order 
at their then redemption value and when the reserve fund 
reached $100,000 all the monthly dues, except the expense 
fund, might be used for the redemption of bonds. The re- 
demption value of the bonds in class A was stated to be as 



Lotteries, Frauds and Obscenity in the Mails. 181 

follows; $33.33 if redeemed at the end of the fourth month; 
$41.66 if redeemed at the end of the fifth month; $50 if 
redeemed at end of the sixth month and so on adding $8.33 
($5 dues and $3.33 profits) each month. The member who 
was paid at the end of the tenth year made only thirteen and 
one-half per cent per annum, while the member, whose bond 
was redeemed at the end of one year made 112 per cent per 
annum. 

Sec. 156. The Southern Mutual Bond and Investment 
Company issued bonds in a similar way and redeemed them 
by the use of the multiple three. The redemption value of 
the bond was ten per cent per annum on amount invested, 
which was paid in cash and a paid up certificate was issued for 
a like amount, which the company proposed to redeem by 
discounting it ten per cent. 

Sec. 157. After the fullest argument both oral and 
printed by the attorneys, representing these companies, and by 
the Assistant Attorney-General for the Postoffice Department, 
representing the Government and after mature consideration 
and an exhaustive examination of the questions presented, the 
then Attorney-General of the United States (Hon. Judson 
Harmon), in an opinion rendered by him on the 24th day of 
February, 1896, held all these schemes to be lotteries or 
similar enterprises. 21 Op. Att ? y-Gen. 313. 

In this controversy, which lasted for several months, it was 
conceded by the attorneys for the companies that the same basic 
principle was involved in all the schemes, though varying in 
detail, and Gen. Harmon, for that reason, "chiefly considered 
the case of the Pettis County Bond Investment Company" and 
in the opinion he gave, he had reference to that case alone, as 
he believed it covered all the others. These Companies, through 
their attorneys, contended the schemes did not differ in 
principle from fire or life insurance and that they were in fact 
"fairer and better because the bondholder does not have to 
wait to die or lose his- property to realize on them." To this 
contention it was replied, on behalf of the Government, that 
the principle, underlying insurance, was entirely different from 



182 Lotteries, Frauds and Obscenity in the Mails. 

the principle upon which these schemes were operated. In 
the one case the contract was a wager, pnre and simple, and in 
the other it was not. In insurance, the insurer deals in the 
same way with all, similarly situated, while in these schemes 
the companies by arbitrary methods, discriminated in favor 
of some of their members and against others, though they had 
paid precisely the same sums and had complied with precisely 
the same conditions. If the lives of ten men be insured for 
one year and, at the end of the year if they are all living, 
none of them gets anything ; if all shall be dead, their bene- 
ficiaries would all receive the amounts of their respective 
policies. But ten men might go into one of these companies 
and continue to pay their dues for a given time, when one of 
them would receive what he had invested and in addition a 
large profit and the other nine would get nothing. This dis- 
crimination among members, all of whom have literally com- 
plied with all the conditions, could not be fairly made, except 
upon the theory that they were engaged in a gambling trans- 
action. 

Sec. 158. May in his work on insurance Sec. 5, says: 
"It (an insurance contract) is also what the Trench writers 
term an aleatory contract, or one in which the equivalent 
consists in the chances for gain or loss to the respective parties, 
depending upon an uncertain event, in contradistinction to a 
communitive contract, in which the thing given or the act 
done by one party is regarded as the exact equivalent of the 
money paid or act done by the other. Each party runs his 
risks. The insurer will gain the premium if no loss happens; 
and will be required to make reparation if it does. On the 
other hand the insured will in the former case have paid his 
premium to no purpose, while in the latter he will be indem- 
nified for his loss by the insurer." 

The same author says: "Insurance is a contract whereby 
one, for a consideration, undertakes to compensate another if 
he shall suffer loss." Sec. 1. 

"Wherever danger is apprehended or protection required, 
it (Insurance) holds out its fostering hand and promises in- 



Lotteries, Frauds and Obscenity in the Mails. 183 

demnity. This principle underlies the contract and it can 
never, without violence to its essence and spirit, be made by 
the assured a source of profit, its sole purpose being to guaranty 
against loss or damage." Sec. 2. 

And hence an insurance where there is no interest is a 
wagering contract and void. Mr. May again in Sec. 74, 
says: a But both in England and in some of the States of 
this country the legislative powers have intervened and ex- 
pressly declared the invalidity of policies without interest. And 
even when this intervention has not taken place the court-s 
now, nearly without exception, hold such policies void, not 
only because in contravention of the fundamental object of 
the contract-indemnity, since where there is no interest there 
can be no loss and where there is no loss there can be no 
indemnity, but because when the insured has nothing to lose 
but everything to gain by the happening of the event insured 
against, it would be dangerous and demoralizing to subject 
the insured to so great a temptation to destroy the property 
or life upon which the insurance is effected. * * * . . And 
indeed the nearer the insured is brought to the terms of the 
contract into such position that he can in no event be the 
gainer, the more nearly will the contract conform to the true 
principles of insurance." And this is the doctrine of all 
the writers and courts. 11 Am. and Eng. Ency. of Law 280, 
and note. 

Sec. 159. Speaking of the contention of the operators 
of the Bond Investment Schemes that the principle of their 
schemes was not unlike the principle underlying insurance, 
General Harmon, in the opinion above referred to, said : 

"The fallacy consists in confusing mere chance with un- 
certainty. One's property may not burn at all; and the time 
he will die is not known; but neither event depends upon 
mere chance, and the law therefore recognizes contracts con- 
tingent upon them while it does not countenance lotteries. 
Yet the argument advanced applies as well to lotteries as to 
the preference feature of the business of this company. If 
the prizes in lotteries had been made to depend upon the 



184 Lotteries, Frauds and Obscenity in the Mails. 

happening of some serious event to which all persons are liable, 
it is quite likely that the law respecting lotteries would not be 
as it is. But the name 'lottery,' which originally implied 
casting lots, now covers any determination of gain or loss by 
the issue of an event which is merely contrived for the occa- 
sion. 

It is said also that, as one of the features of these 'invest- 
ments' is that the bondholders, who persist, gain advantage 
from the forfeiture of the bonds of those who fail in their 
payments, the case presented is the same as that of insur- 
ance on the 'tontine'* plan. If one of these companies should 
eliminate the preference in payment of coupons to be determ- 
ined by the mere holding of a lucky number, this question 
might arise. But the chance of preference lies among bond- 
holders of equal standing in all respects. The fact that the 
prospects of all who continue to pay are improved by the 
dropping out of holders of bonds bearing lower numbers, does 
not eliminate the element of mere chance and therefore does 
not alter the case. 

The principle of survivorship involved in tontine insur- 
ance has been the subject of doubt and discussion, because, 
in its simple form, it has been claimed to be mere wagering 
among the members on the length of their lives. But it 
involves no lottery element. If, however, to a series of tontine 
endowment policies a scheme should be added for paying 
some of them before maturity according to the: determina- 
tion of any form of hazard, we should have a partial analogy 
to the present case. But the argument would fail because 
no such system has ever been held or admitted to be lawful." 

Sec. 160. If the Attorney-General had said the pay- 
ment of an insurance policy is not made dependent on chance, 
instead of saying that the event did not depend on chance his 
language would be less susceptible of misconstruction. As 
has been shown in the discussion of the proposition, when a 
prize is dependent on chance, there is a clear distinction be- 
tween a real, bona fide transaction, in which the profits or 
losses may depend on events, uncertain in the sense that the 



Lotteries, Frauds and Obscenity in the Mails. 185 

parties do not know and can not know what the outcome will 
be and wagering contracts. This distinction was evidently 
intended to be made, for the General says that the "name, 
'lottery/ which originally implied casting lots, now covers 
any determination of gain or loss by the issue of an event, 
which is merely contrived for the occasion" 

The companies seized upon the statement made by 
the courts in the McDonald case and in U. S. Ex. 
rel. vs. Sherwood, that the chance element in these 
schemes consisted in the fact, that no member knew 
what the number of the bond awarded to him 
would be and argued that if they would inform purchasers 
of bonds what numbers they would get, the element of chance 
would be eliminated. In reply to this contention the Assistant 
Attorney-General for the Postoffice Department said: 

"In the first place this is utterly impracticable. 
These companies do business all over the United 
States. If the numbers of the bonds are known to 
the purchasers at the time of purchase, the com- 
pany must proceed in one of three ways; first, the 
application must be made directly to the company at its head- 
quarters, or, second, it must appoint agents to receive applica- 
tions and sell bonds, or, third, it must sell bonds from head- 
quarters and through agents at the same time. ]STo matter 
which course it may adopt it will be impossible for purchasers 
to know the relative positions of their bonds in the order of 
redemption. It is true they may know the numbers of the 
bonds they receive, but what I mean to say is that they can 
not know the relative positions of their bonds in the order in 
which they will be paid. Suppose the company sells no 
bonds except from headquarters ©and has no agents at all. 
Then a man ordering from a distant place could not know the 
next lowest bond unsold in order to apply for it, and hence he 
would be compelled to send in his application and leave it to 
the officers of the company to insert any number they saw 
proper, and this would subject the scheme to the same objec- 
tionable features that were condemned in the above cases, for 



186 Lotteries, Frauds and Obscenity in the Mails. 

he would not know the number of the bond he was to get 
before buying. If the company should notify him at his 
request what number of bond he could get,, it would have 
to give him the next lowest bond unsold or put it so far 
ahead as to be absolutely certain that it would not be sold 
to someone else before it could be accepted. In either 
event, if the applicant should refuse to take it, it would 
leave that bond unsold and other bonds of higher numbers 
than that one would in the meantime have been taken, 
and in dealing with a country as large as the United States it 
would be impossible for the company to sell bonds from its 
headquarters and designate in advance exactly what bonds a 
man could get. If the company should appoint agents in dif- 
ferent parts of the United States it would be compelled to 
furnish them each with certain specific bonds; it would have 
to give the agent in Texas bonds of a certain number, the 
agent in Maine bonds of a certain number, and so on in every 
State in the Union. The man in Texas might have the bonds 
from 1 to 100 and fail to sell any of them, whereas the man in 
Maine might have the bonds from 1,000 to 1,100 and sell them 
all before the bonds prior thereto, or any considerable number 
of them, had been disposed of. "When a man buys, say, 1,001, 
it is upon the theory that 1,000 bonds have actually been sold 
and 1,000 men are then paying their dues to the company in 
order to redeem them. But it may turn out, and probably 
will turn out, that not half of these bonds have been sold, and 
the man takes No. 1,001 and instead of being in the relative 
position of redemption indicated by the number, his relative 
position in the order of redemption may be 500, and hence I 
say it is utterly impossible, no matter what plan of business 
the company adopts, for a man to know the exact position of 
his bond in the order of redemption, and it is mere chance as 
to whether his bond will be redeemed early or late. If the 
company sells higher-numbered bonds before all the lower 
numbers are sold the doors will be wide open for it to perpe- 
trate upon its patrons the most stupendous fraud by claiming 
that the company is entitled to the redemption of all bonds 



Lotteries, Frauds and Obscenity in the Mails. 187 

not sold, just as lottery companies make all tickets unsold 
belong to them and receive the prizes drawn by them and 
besides that the company would pay no dues on the bonds 
not sold, and hence the higher numbered bonds would not be 
redeemed at as early a date as they would be if the bonds 
were in the hands of bona fide purchasers who were paying 
dues thereon; hence it is patent that it will be a matter of 
chance as to the redemption of these bonds. 

In the second place, even if a patron knows the number 
of his bond, and that number is at the time he buys the lowest 
unsold number, yet he can not know the order of its redemp- 
tion. He may know its order at the first drawing; that is, at 
the first monthly payment of bonds by the company; but when 
he is called upon for the second payment it will be utterly im- 
possible for him to know when his bond will be reached and 
paid, for the reason that that will depend upon the number of 
bonds redeemed, the number of bonds allowed to lapse, and the 
number of new bonds sold. All of these elements affect the 
order of redemption and over none of them has he any control. 
He can not know whether a man will continue to pay his dues 
or whether he will be able to pay his dues, nor can he know how 
many men will buy bonds of a higher number than his own, or 
whether any will and how long they will continue to pay if 
they do buy; and this contingency will continue at every 
monthly payment of bonds. A man goes to the office when 
the money is distributed and asks if his number has been 
reached. He is informed that it has not. He then inquires 
when it will be reached, and is informed that it is not known. 
He inquires why it is not known, and he is told that it depends 
entirely upon the payments made by other bondholders both 
prior and subsequent to his, and it is unknown what they will 
d" "tiiey may pay and they may suffer their bonds to lapse. 
He goes to the company at the next monthly payment and he 
is given the same information. He pays again and takes his 
chance at the next drawing; the same result follows, and in 
time he becomes disgusted and quits, and thereby affects 
others." 



188 Lotteries, Frauds and Obscenity in the Mails. 

And on this point General Harmon, said: "It is now 
claimed that the subscriber takes no chance whatever, because 
he does not embark in the scheme unless he sees from his bond 
when presented that it bears one of the numbers which entitle 
its coupons to payment early enough to suit his views of 
expected gain. 

This is ingenious and specious enough, no doubt, to in- 
duce subscriptions by the unthinking. At any rate the com- 
pany is eager to make the attempt, though it is not willing to 
eliminate the preferred coupon feature. But it is manifest 
that if every subscriber, by merely comparing the number 
of his bond with the order of numbers printed on the back 
of it, could tell, with any approach to certainty, the order 
in which his coupons would be reached for payment, nobody 
would take the bonds which are to be passed by; and unless 
these are taken there is an end of the business. One might 
as well try to run an ordinary lottery without blanks as 
such a preference investment scheme without any unprefer- 
red. Some must lose what others gain. It is manifest 
upon the slightest reflection that, as all the subscribers have 
the same right of rejection upon the presentation of the 
bonds, and the numbers are given upon presentation for issu- 
ance, no subscriber can possibly tell how many of the 
bonds bearing lower numbers than his own are really out- 
standing when his bond is presented. So that it may justly 
be said that the change has made the chance feature of the 
scheme worse rather than better because, if the elements of 
uncertainty are not in fact increased, they are given a fic- 
titious appearance of certainty." 

Sec. 161. These companies contended also that, even, 
if chance did enter into their schemes, it determined only the 
time when their obligations should be redeemed and that took 
them out of the category of lotteries and they quoted, with 
much confidence, this language from the opinion of Judge 
Blodgett in the Zeisler case, 30 Fed. Rep. 499: "If these 
drawings determined only the time when the bonds would be 
paid, I should say the determining of that time by lot or 



Lotteries, Frauds and Obscenity in the Mails. 189 

drawings would not give them the characteristics of a lottery." 
The correctness of the principle thus laid down by Judge 
Blodgett in that case may be conceded; but the Judge pro- 
ceeded to state that "when a city or government, in order 
to make an inducement for people to buy their bonds, holds 
out large prizes, to be drawn by chance or determined by lot 
in the manner in which prizes are usually determined in even 
an honestly conducted lottery, it seems to me it comes clearly 
and distinctly within the inhibiting clause of the Statute; 
* * * and hence it seems to me that the purpose of the scheme 
was not only to determine by lot when the bonds were 
to be paid, but also to determine certain extraordinary chances 
to the holders of the fortunate numbers drawn." So in the 
Bond Investment Schemes, if the lot or chance determined 
nothing but the time when the obligations with interest to 
date of payment would be made the prize element would be 
wanting; but it did more. It determined not only when the 
amount contributed by a member, with interest, should be 
paid but also a large sum in addition to the sum invested, 
which was not earned by way of interest or in any other 
legitimate way. In the Horner case the Supreme Court of 
the United States approved the distinction made by Judge 
Blodgett, in the Zeisler case, and announced that when the 
chance determined when a large sum in addition to the face of 
the bond and interest thereon would be paid, it was a lottery. 
In other words where prizes are distributed by lot or chance, 
there is a lottery or similar enterprise. There can be no 
lottery where there is no prize. The United States had the 
right to pay some of its bonds after the expiration of five or 
ten years, though payment was not demandable till the expira- 
tion of twenty or forty years, and it exercised the right to 
redeem and did redeem some of these bonds, and, it is proba- 
ble, selected those to be redeemed by lot or chance, or arbi- 
trarily, which is tantamount to the same thing; but it can not 
be claimed that the Government conducted a lottery scheme, 
simply because it did not distribute prizes to those, whose 
bonds were paid. It simply paid the principal and interest 



190 Lotteries, Frauds and Obscenity in the Mails. 

to date of payment, and hence the prize element of a lottery 
was wanting. 

So Railroad and other corporations sometimes issue bonds 
and insert a provision that out of the surplus funds, they 
may have on hand from time to time, they will redeem bonds, 
paying their full value and the interest thereon to date of 
payment and the bonds to be redeemed before the full ma- 
turity period shall be determined by lot. In such case the 
scheme is not a lottery, because it lacks the prize element. 
The same principle is applied in case of partition of property 
among joint owners. The property is divided into equal parts 
and the parts to be assigned to the respective owners may be 
determined by lot without bringing the transaction within 
the meaning of a lottery, simply because no prize is awarded to 
anyone. 

Sec. 162. Up to the time of the rendition of the opinion 
by General Harmon in February, 1896, the Postoffice De- 
partment had permitted some of the Bond Investment Com- 
panies to do business through the mails where they promised 
to pay simply the amount invested with interest thereon at a 
rate not exceeding ten per cent per annum and a proportionate 
share of the profits in excess of ten per cent interest, on the 
distinct ground that it was thought this eliminated the prize 
element from the schemes though the lot or chance element 
still inhered in them; but after that opinion was rendered 
the Department held the schemes to be lotteries or similar 
enterprises, notwithstanding the limitation or supposed limita- 
tion of the profits paid. This change in policy was based on 
two grounds. First. It was found by experience that the 
companies, according to the schemes they devised, could not 
pay the profits they promised to all their investors As in 
the cases given above the companies retained a large per cert 
of the income to defray their expenses and then set aside the 
largest part of the remainder of the income for the monthly 
redemption of their obligations, so that the part that could 
earn any interest or make any profits was very small. In 
order to enable the companies, therefore, to pay even ten per 



Lotteries, Frauds and Obscenity in the Mails. 191 

cent profit to the lucky members, they provided that if the 
investors failed to pay their dues before a specific time, vary- 
ing from two to seven years, they would forfeit all they had 
previously paid, and that after certain periods, varying from 
two to seven years, the members, whose bonds were not 
reached and paid prior to that period, might take paid up ob- 
ligations, sometimes for the amounts of the reserve fund they 
had contributed and sometimes for other amounts, but always 
less than the full amounts they had contributed and these paid 
up obligations were redeemable in the same order as in the 
original plan. Thus there was an inequality of benefits among 
members similarly situated, which was the result of the chance 
element in the schemes. 

Besides this it was found the companies estimated their 
profits in excess of ten per cent interest and by doing that they 
contrived to pay the same old profits to the lucky members, 
whose bonds were reached and paid monthly in numerical 
order, or by the use of a multiple or numeral and thus per- 
petrated a fraud upon the Department and the public. 

Second. From the opinion of General Harmon it was 
plain the determination of gain or loss to the members was by 
the issue of an event which was "merely contrived for the 
occasion." 

Sec. 163. In England, it seems, the weight of authority 
is in favor of the principle involved in the Bond Investment 
Schemes. In O'Connor vs. Bradshaw, 5 Ex. 882, the object 
of a company was to raise subscriptions in small sums, to 
purchase land, erect dwellings thereon, and allot them to its 
members, on such terms, as should enable them to become 
freeholders, and obtain other privileges, according to the 
number of shares they held. Their right to obtain these 
privileges was not absolute, but depended upon the result of a 
ballot, according to which, a small number only of the sub- 
scribers could obtain present possession of houses and the 
proportion of those who had obtained them during fiye years 
was very small. The Lord Chief Baron was of opinion that 
this constituted a lottery scheme. Baron Park, however, did 



192 Lotteries, Frauds and Obscenity in the Mails. 

not concur in this. He put this as an illustration : "Suppose 
a number of persons were to buy a large collection of pictures, 
some of which far exceeded others in value, might it not be 
decided by lot, who should have the first choice V 9 But the 
company being illegal on another ground, the point was not 
decided. 

Sec. 164. The next case of this kind is Sykes vs. Beadon, 
11 Ch. Div. 170. The association in that case was formed on 
the principle of investing the subscriptions of the members and 
dividing the capital fund and profits among themselves by 
means of certificates, convertible by annual drawings by lot 
into preference dividend bonds, bearing interest, with a bonus. 
The Master of the Rolls, without deciding the point finally, 
said: "I have grave doubts whether this association is not 
illegal, as being within the Lottery Acts. Building Societies 
are in a different position — they are loan societies. In an 
association such as this, it is not a case of loans to be returned, 
but of subscriptions to be divided. The subscriptions are to 
be divided among the subscribers by drawings by lot and the 
prize is a bond with a bonus. The holders of certificates are 
persons, who subscribe money to be invested in funds, which 
are to be divided among them by lot and divided unequally. 
That is, the persons, who get the benefit of the drawings, get a 
bond, bearing interest and a bonus, which gives them different 
advantages from the persons, whose certificates are not drawn, 
and it depends upon chance, which gets the lesser or the greater 
advantage. It is, therefore, a subscription by a number of 
persons to a fund for the purpose of dividing that fund 
between them by chance and unequally. If that is not a 
lottery it is very difficult, at all events to my mind, to under- 
stand what a lottery is. 

It is called a division by lot, which means lottery. It 
says that the selections of certificates shall be by lot, and that 
is to be done in the ordinary way, by chance, and the benefits, 
as I said before, are unequal." 

Sec. 165. The next case, in which it was sought to bring 
a company of this character within the lottery Acts, is Wal- 



Lotteries, Frauds and Obscenity in the Mails. 193 

lingford vs. Mutual Society, 5 App. Cas. 685. The objects 
of this society were, ostensibly, to advance the interests of its 
members and the mode of operation was to obtain monthly 
subscriptions from the members and to advance capital to them 
at interest upon certificates of appropriation, which were given 
to the members on joining the Society, which certified their 
right to receive advances and share in the profits. Holders 
of life certificates were entitled to tontine bonuses. Advances 
were allotted to the members as follows: The first and every 
fourth one thereafter by drawing, free of any premium or in- 
terest, while the intermediate appropriations were allotted to 
the member or members tendering the highest premium. 
These advances were to be repaid by quarterly instalments. 
It was urged that this scheme was illegal under the Lottery 
Acts, as the benefits of the society were to be given to the 
members by lot or chance. On appeal to the House of Lords 
it was unanimously held that the Society did not come within 
those Acts. Lord Selborne thought those Acts had reference 
to gambling transactions only and in his judgment, the scheme 
in question was not a gambling transaction and therefore the 
Acts could have no application to it. Lord Hatherly said: 
"If this were to be held a lottery nearly every building society 
and a great many other societies, formed upon a similar foot- 
ing, might be found to fall within the enactments against lot- 
teries." This case is in direct conflict with the decision in 
Sykes vs. Beadon and in effect, though not in terms, overrules 
it and it is thought since this decision of the House of Lords 
and the case of Smith vs. Anderson, 15 Ch. D. 247, it must 
be taken that there is, in England, nothing illegal in a com- 
pany or partnership distributing dividends or profits by lot. 

Sec. 166. The first time the question, whether these 
schemes came within the Lottery Act of Congress, was pre- 
sented to the courts for determination, was in the latter part 
of 1893 in the case of the United States vs. McDonald, 59 
Fed. Rep. 563, before Judge Grosscup at Chicago. The 
plan of business of the company, which McDonald advertised 

13 



1 94 Lotteries, Frauds and Obscenity in the Mails. 

through the mails, was this: The company issued numbered 
bonds of $1,000 each in numerical order to its members. For 
these bonds the applicant had to pay $10 as an initiation fee 
and $1.25 per month afterwards. The company set apart 
twenty per cent of the monthly dues as an expense fund and 
eighty per cent as a so-called trust fund for the redemption 
of bonds, which were reached and paid in the order of 
1, then 5, then, 2, then 10, and so on, the priority alternating 
between the unpaid bonds, bearing the lowest number and the 
unpaid bonds, bearing the lowest number divisible by five, 
one class being known as numerals, and the other class as 
multiples. 

Judge Grosscup in his charge to the jury in that case used 
this vigorous language in relation to the character of the 
scheme : 

"The court of course is not sitting here to pass upon the 
fairness of any such transaction. Two hundred years ago, 
when coaches were robbed by highwaymen on the heaths of 
London, it was always said that the highwaymen acted with 
courtesy, but nobody but an ignorant fool returned to London 
without knowing he had been plundered." 

The Judge then proceeded to charge the jury in regard 
to the lottery features of the scheme. After stating that every 
enterprise, in which men engage, has a return or prize or is 
supposed to have and that the hope of this is an incentive to 
business activity, and giving life and tontine insurance as 
illustrations of legitimate transactions, he said: 

"In the case at bar the return or prize is $1,000. . 'Now, 
is that determined by lot or chance ? Is it determined by one 
of the laws of nature, or of industrial growth,which determines 
the other returns of life? Let us look at the practical work- 
ings of the scheme. Let us look at it first, independently, 
of what is called the multiple system. Here is a company 
which in two years has taken in more than fifty thousand 
applications. In order to make a return certain to each of 
these applicants of the amount of money promised in the bond, 
it would be necessary that the company should have a fund 



Lotteries, Frauds and Obscenity in the Mails. 195 

of $5 0,0 00,000. In two years they have only accumulated a 
fund of $206,000. According to the constitution of the 
company, outside of lapses, there are 50,000 men who are 
entitled to these returns if they persist in paying. In two 
years, 206 have been paid. If each man were to get a return 
according to the promise of the company, outside of lapses, 
and every dollar which went into the fund of the company 
were to be used for that purpose, and no man to receive 
more than what he paid in, it would take one thousand months, 
or more than eighty-three years, for each man to receive back 
his return. This money would be idle, not growing hy interest 
or other investment. Is it not perfectly apparent that from 
the very necessity and constitution of the scheme, if the mul- 
tiple system were not introduced, the company could not go on, 
and no man would receive back anything except thoje who 
had been the fortunate possessors of the first bonds? It is 
said, and is one of the boasts of the company, that everybody 
who has been paid back has been paid $1,000 on an in^j^tment 
not to exceed thirty dollars. 

That again shows the entire impossibility, according to the 
constitution of the scheme, of but a limited few, oup in a 
hundred, ever receiving any return or any prize except for the 
lapses. Because money lying idle in the treasury, shorn in 
the first place of twenty per cent of the amount, will never 
grow to pay one thousand to one or one thousand to thirty, 
so long as the present economic law of the universe prevails. 
These defendants have foreseen this, and foreseen that the 
company must therefore come to an immediate end, and have 
constituted what is called 'the multiple system.' Thereby 
a chance is held out to men, even after the company has grown 
to be fifty thousand, to receive an early payment of his bonds. 
But upon what is that chance dependent? What determines 
that return or that prize? Any law of nature, or of indus- 
trial growth, such as applies to insurance companies, or real 
estate investments, which I have used as illustrations? ISTot 
at all. It is solely dependent upon the order in which his 
bond may go through the registration process. If bo draws 



196 Lotteries, Frauds and Obscenity in the Mails. 



a multiple, and the company continues, he eventually will be 
paid. 

If he draws a numeral, it is as morally certain as any 
law of the universe, that unless the company is almost entirely 
abandoned by its bondholders, he will never be paid. 

It is said here in argument that the lapses will secure 
certain payment in time; in other words, enough men will 
become discouraged at the outlook and will drop out, so as to 
advance those whose bonds are deferred. What does that 
mean? It means that by the very consitution of this com- 
pany the success of its enterprise depends entirely upon its 
insolvency, its gross and well-known insolvency — so insolvent 
that in the very method of its organization no hope of its 
carrying out its promise can be entertained. E"ow the court 
can not say that that is a legitimate enterprise, promising a 
certain return of money, which, by the very constitution of 
the company, is dependent upon the insolvency of the com- 
pany and a wholesale repudiation of its promises. That is not 
the rule of any other legitimate enterprise. The determina- 
tion, therefore, of the return or prize is dependent upon a 
chance or allotment. 

The only substantial difference between the scheme dis- 
closed to you by the proof and the well recognized lotteries of 
the world, such as the Louisiana Lottery Company, is that the 
latter are, in comparison, honest and free from the oppor- 
tunities of chicanery. The wheel of the lottery and the hat 
of the raffle are to the fortune hunter incomparably fairer 
contrivances for the determination of his chances. He -is not 
dependent in them upon the honesty or accuracy of a secretary 
with whom it is as easy to put one application through the 
register as another. The whole scheme disclosed by the proof 
is a cunning trick to attract the cupidity and ignorance of 
men. A great menace to the civilization not only of the 
United States, but of the world, is the growing tendency to 
gamble or engage in lottery. Two hundred years ago their 
promoters were characterized in the streets of England as 
rogues. 



Lotteries, Frauds and Obscenity in the Mails. 197 

~No prospect is so attractive as that which is wrapped up 
in the mysteries of a chance! To the winner comes some 
money, many congratulations, wide advertisement throughout 
the newspapers, and the propensity to go in again. To the 
losers, one hundred-fold in number, come stripped homes, 
impoverished wives and children, lost opportunities of build- 
ing up a competence legitimately, and, in too many instances, 
the temptation to go in again upon means that are obtained 
from an employer, or cestui qui trust, first by a supposed bor- 
rowing, then by intentional theft, forgery, and embezzle- 
ment. The rainbow of hope lures and lures until its chaser 
falls over the precipice into suicide or the penitentiary. " 

McDonald was convicted by the jury and was sentenced 
by the court to pay a fine and to be imprisoned in jail, for 
eleven months, and on his appeal to the Circuit Court of 
Appeals of the Seventh Circuit this sentence was affirmed, 
63 Fed. Eep. 426. The Federal Court of Appeals, per Wood, 
Judge, thus describes the plan of business of the company: 
"By the table which determines the order of payment, bond 
Eo. 1 is payable first, ISTo. 5 next, ~No. 2 next, and so on, alter- 
nating between numerals, so-called, and multiples of 5, except 
it will be observed that between every fourth and fifth of the 
mulitples no numeral intervenes. There are 4 numerals to 
every multiple, and it follows that a bond, which might as 
well be called a ticket, bearing a high multiple number, will 
be entitled to payment sooner than three-fourths of the bonds 
bearing lower numbers among the numerals, and the further 
the process is carried the greater becomes the disparity between 
the multiple and numeral numbers next to be paid, and cor- 
respondingly the bonds numbered with numerals, except as 
benefited by lapses, become less and less valuable, because the 
day of 'possible payment becomes more and more remote. w 

Judge Woods adds : "The element of chance which con- 
demns the scheme is incident to the numbering of the bonds 
before issue, and not directly to their payment afterward." 

The operators of the scheme in that case contended that 
the order of the payment of bonds being determinable by the 



198 Lotteries, Frauds and Obscenity in the Mails. 

multiple system, a new invention, the inducement to purchase 
a bond was as great at one time as another. The court held, 
however, that "whether or not a purchaser will obtain a bond 
of one number or another depends upon the order in which 
his application shall reach the hand of the secretary, and that 
is largely a matter of chance. The secretary receives applica- 
tions by mails and otherwise, sometimes singly and sometimes 
a number together, and in the order of receipt and as he 
chances to take up one or another first, passes them through 
a registering device, and in accordance with the notations so 
made upon the application the bonds are numbered and is- 
sued." It was further urged that since the only element of 
uncertainty was as to the date at which the bonds were to be 
paid this was not sufficient to characterize the business as a 
lottery but the court held that this contention ignored the 
element of chance incident to the numbering of the bonds 
before they were issued and that but for the purchaser's hope 
or as might be well said for his chance of getting a multiple 
number, the business would soon cease. The further conten- 
tion was pressed upon the court that since every bondholder 
who continued to pay his dues would ultimately receive the 
promised sum, the prizes were equal and therefore there was no 
lottery. Judge Wood justly answered: "It is idle to say 
that a sum or an obligation for a sum, due and payable to-day, 
or at an early day, is of no more value than an obligation for 
an equal amount without interest, payable at a remote and 
indefinite time." The court might have added, on this point, 
that the members who were paid at an early date did not pay 
nearly as much as those who were paid at a remote period 
though by the scheme each received $1,000. For instance, 
the member whose bond was paid at the end of the first month 
had invested only $11 25-100 (the initiation fee of $10 and 
one month's clues, $1.25), while the member whose bond was 
reached and paid at the end of ten years had invested $160. 

Sec. 167. The next case, involving the principle of 
the Bond Investment Schemes, arose in February, 1894, be- 
fore Judge Bradley of the Supreme Court of the District of 



Lotteries, Frauds and Obscenity in the Mails. 199 

Columbia, in the case of the United States ex rel. The Old 
Colony Company vs. Sherwood, postmaster at "Washington 
City, which was a proceeding in which it was sought to have 
the court compel the respondent by mandamus or mandatory 
injunction to receive and transmit the advertisements of the 
company through the mails. In the scheme involved in that 
case, the company issued certificates numbered from one, up 
and redeemed them in the order of 1, 3, 11, 2, 6, 22, 3, 9, 33, 
4, 12, 44, etc., thus combining the numerical, the multiple 
and the numeral systems, to determine the order of maturity 
of the certificates. In each group of three redemptions the 
company resorted first to the numerical order, then to the 
multiple 3, and lastly to the numeral 11. The company 
claimed that each investor was informed at the time of his 
purchase what would be the number of his certificate. An 
initiation fee was charged and small sums as monthly dues 
were required. Judge Bradley dismissed the bill, holding 
that the scheme was a lottery but he filed no opinion and there 
the case ended. 

Sec. 168. In the summer of 1894, the National Invest- 
ment Society of Washington City instituted a proceeding in 
the Supreme Court of the District of Columbia before Judge 
McComas against Postmaster Sherwood, to compel him, by 
mandamus or mandatory injunction, to receive and transmit, 
through the mails, the society's advertisement of a Bond In- 
vestment Scheme, which in substance was as follows: The 
Society proposed to issue shares to the amount of $50,000,000, 
in denominations of $100 and $50, the $100 shares being des- 
ignated as A shares and the $50 shares as B shares. Two 
denominations of certificates were to be used, one containing 
10 A shares and one containing 10 B shares. The certificates 
were to be numbered consecutively in the order in which ap- 
plications were filed, and the 10 shares in each certificate were 
to be numbered from 1 to 10, inclusive. The shares were 
payable at the end of ten years absolutely but provision was 
made for their redemption monthly, to the extent of the money 
on hand, in the following order: Share No. 1 in certificate 



200 Lotteries, Frauds and Obscenity in the Mails. 

No. 1, then share ZSTo. 1 in certificate No. 2, and so on, paving 
the first share of each certificate in force until the end of one 
year from the date of payment of the first share, when share 
No. 2 in certificate No. 1 would be next in order of pay- 
ment, then share No. 2 in certificate No. 2 and so on, until the 
second share in all the certificates issued the previous year and 
still in force had been paid, when share No. 3 in certificate 
No. 1 would be next in order, then share No. 3 in certificate 
No. 2 and so on as before, until each share in certificate No. 1 
had been used as a starting number and the ten series finished, 
after which the lowest numbered share in the lowest numbered 
certificate, then in force, would be taken as a starting number 
and the same rule was followed as in the previous series for 
all time. The holders of shares were required to pay monthly 
seventy cents on each A share and thirty-five cents on each B 
share. The first two months' dues were set apart as an ex- 
pense fund and the dues after that were divided into, first a 
redemption fund of 71 3-7 per cent; and second a reserve fund 
of 14 2-7 per cent; and third an expense fund of 14 2-7 per 
cent. 

Judge McComas, after full argument on both sides of a 
demurrer filed by the respondent, carefully prepared an opin- 
ion in which, after quoting at length from the opinion of 
Judge Woods, in the McDonald case, said: 

"I adopt the reasoning of the court in the McDonald case 
and, therefore, regard the scheme of the National Investment 
Society as a lottery, 'or similar enterprise offering prizes de- 
pendent upon chance.' The postmaster rightly refused to per- 
mit these letters and circulars concerning such an enterprise to 
be carried through the mail. 

. The plan of the National Investment Society, as set 
forth in the letter, circulars and by-laws, shows that it is im- 
possible for the members to share equally in the funds, and 
that the more fortunate applicants are those whose certificates 
bear the earliest numbers, that the number of the certificates 
and their consequent value depends upon chance. 



Lotteries, Frauds and Obscenity in the Mails. 201 

In different states applicants on the same day may mail 
subscriptions for certificates in this company. Whether or 
not an applicant will receive a certificate of one number or 
another depends upon the order in which the applications may 
reach the officer of this company who issues the certificates, 
and that is a matter of chance. This officer receives these 
applications by mail or otherwise; it may be one at a time, it 
may be many at the same time, and according to the order in 
which he chances to receive them or as he chances to take up 
one or another and determines the number of each applicant's 
certificate, the certificates are numbered and issued. He who 
by these chances luckily receives an earlier number will be paid 
sooner and will pay in less money than another who, subscrib- 
ing on the same day, receives a later number, and will by 
these chances be required to pay longer and pay more money 
and wait longer for payment of his shares." 

The Society appealed this case to the Court of Appeals of 
the District of Columbia but Sherwood having gone out of 
office before it was reached, that court refused to entertain 
jurisdiction, though the Assistant Attorney-General for the 
Postoffice Department proposed to waive the point. 

Sec. 169. In the spring of 1895 the officers of the Equi- 
table Investment Company were indicted in the United States 
District Court at Council Bluffs, Iowa, (Judge Woolson pre- 
siding), and were convicted of conducting a lottery through 
the mails. The company in that case issued numbered bonds 
to its members in numerical order and redeemed them in the 
order of 1, 3, 6, 2, 9, 18, 5, 21, 24, etc. Judge Woolson held 
that the scheme was a lottery enterprise but his charge to the 
jury was never published. There was no appeal. 

Sec. 170. McLaughlin vs. The National Mutual Bond 
and Investment Company (64 Fed. Bep. 908) is a leading and 
important case on the schemes now under review, because it 
is the only case that has been before the courts involving the 
numerical order alone of the redemption of obligations. The 
representatives of this scheme vehemently contended that 
there could possibly be no chance in a plan where the obliga- 



202 Lotteries, Frauds and Obscenity in the Mails. 

tions of the company were redeemed in numerical order. 
That case was decided by Justice Dallas in the Circuit Court 
of the United States at Philadelphia. 

The company in that case was incorporated under the 
laws of West Virginia for the purpose of selling bonds on 
monthly instalments and to redeem them according to a plan 
that insured perfect equity "to both large and small investors, 
the advantage of the association being to encourage and assist 
persons of moderate means to systematic saving, and by ad- 
vantageous co-operation, to realize larger profits than they 
could by investing in savings banks or building associations." 
The company issued and sold bonds, which were, in form, certi- 
ficates of its agreement to pay $1,000 to the person named in 
each bond, no definite time for such payment having been 
fixed. The holders of the bonds were each required to pay 
$4 monthly and $1 quarterly and a failure to pay the dues for- 
feited all the money paid. The company stipulated to pay 
$1,000 to the owner of each bond when the monthly instal- 
ments paid by him and his share of the reserve fund should 
amount to $1,000; or in the alternative would refund him the 
amount of his monthly instalments, paid by him, with interest 
at the rate of two per cent at or after the expiration of three 
years. The bonds were subject, however, to redemption in 
numerical order by the payment of the following amounts: 
$336 if the bond was redeemed during the first year; $440 
if redeemed during the second year; $561.33 if redeemed dur- 
ing the third year; and $1,000 if redeemed any time after the 
fifth year. It was nowhere stated what part of the instalments 
was to be appropriated to make these payments but that it 
was very large is apparent. 

Justice Dallas thus characterizes this scheme: 
"Of course any misguided person who might be led into 
such a transaction would, on perceiving its character, hasten 
to withdraw from it, even at the sacrifice of payments already 
made, or would await only the expiration of the period of 
three years to claim the refund provided for. But nothing 
he could do would profit him. Even if the company should 



Lotteries, Frauds and Obscenity in the Mails. 203 

be able to, and should in fact refund liini bis monthly instal- 
ments, with the interest stipulated, he would not be repaid in 
full. At the end of three years he would have paid as 
monthly instalments $144, and this, with 2 per cent interest 
added, would make $146.88, the amount to be refunded; but 
his ''quarterly dues' for the same period would be $12, which, 
being added to his monthly instalments, $144, would make a 
total of $156; and hence the so-called 'refunding' would con- 
sist in returning to him, after three years of waiting, $10.88 
less that he had actually paid in. Manifestly there would be 
nothing in this 'to encourage and assist persons of moderate 
means to systematic saving, and by advantageous co-operation 
to realize larger profits than they could by investing in savings 
banks or building associations.' " 

And after stating that a bondholder whose bond was re- 
deemed the first year would make an excess of $286.68 over 
and above the instalments, paid by him and interest thereon, 
Judge Dallas continues : 

"According to the plan, this excess of $286.68 must be 
provided for from the forfeited or nonf orf eited instalments — 
either or both — paid in by others. If from forfeited instal- 
ments, the one man wins what the others have, by misadven- 
ture, already lost, and if from nonforfeited instalments, then 
the lucky iri dividual gains extravagantly at the cost of later 
purchasers, for these must be additionally postponed in order 
that he may be immediately and excessively paid, and many of 
them must suffer a total loss through the ultimate exhaustion 
of the fund by the 'redemption' of 'bonds of a lower number' 
at an enormous and unconscionable premium. This might be 
deemed fair play by those who wittingly engage in games of 
chance, but as a method of 'systematic saving' provided for 
unwary 'persons of moderate means' it certainly does not 'in- 
sure perfect equity' as equity is understood by courts of justice. 
It appeals to cupidity, not to thrift, and lures to hazard, not to 
providence. It is a contrivance for handing over to some of 
those who embark in the venture the. money of others who join 
in it; and it is quite apparent that this can only continue so 



204 Lotteries, Frauds and Obscenity in the Mails. 

long as the treasury can be replenished by bringing in new 
members. Its inherent vice is substantially the same as was 
pointed out with respect to a similar concern in the case of the 
National Endowment Company (142 Pa. St. 450; 21 Atl. 
879), and of which the Supreme Court of Pennsylvania said: 

'It manifestly belongs to that class of associations, by 
far too numerous, the practical effect of whose operations is to 
enrich a few at the expense of confiding and ignorant people. 
Such corporations are unlawful and injurious to the commu- 
nity.' 

It is evident that the attractiveness of the present project 
is due to the opportunity which it affords for acquiring money 
by chance, and not as the reward of industry, frugality, or 
sagacity. The interesting question to those who participate 
in it is one of fate, and nothing else. It is this: Which of 
them shall be forced to forfeit, and so 'fall in fortune's strife;' 
and which of them, surviving that catastrophe, will have ob- 
tained redemption of their bonds before the final and inevitable 
collapse occurs? Upon these contingencies the monthly and 
quarterly payments are put in jeopardy, and according to the 
issue of the game, the company, the holder of the stakes, dis- 
tributes them among the winners. All such schemes are in- 
hibited. They are deceptive and fraudulent, and in their na- 
ture simply gambling. In re National Endowment Company, 
supra; Brua's Appeal, 55 Pa. St. 294; United States vs. Mc- 
Donald, 59 Fed. 563; Horner vs. United States, 147 U.S. 
449; 13 Sup. Ct, 409." 

Sec. 171. The case, cited by Judge Dallas, in 142 Pa. 
St. 450, presents a similar state of facts. There certificates 
for $200 were issued and redeemed in numerical order. The 
lower court said, and the supreme court approved it, that "The 
scheme or plan of this company convinces us that this is not 
a society for beneficial or protective purposes to all its mem- 
bers, but it is a beneficial society to its officers and a scheme 
to hand over the sum of $200 to a few of the first members 
who join, at the expense of those coming in later, and this on 
an investment of about $50 by each of the fortunate low-num- 



Lotteries, Frauds and Obscenity in the Mails. 205 

bered certificate holders. It is quite apparent this can only 
continue so long as the treasury can be replenished by bringing 
in new members." Speaking of getting new members the 
court says: 

"This is where the vice of this beneficial society appears. 
Each member finds that his only hope for realizing his $200 
depends on getting in as many new victims as possible. It 
should be noticed that this endowment fund is not being in- 
vested so as io earn or accumulate anything. As often as $200 
accumulates in the treasury, the lowest numbered certificate 
holder takes it. It is very plain that each member who grasps 
the desired $200 gets out $150 of money that never belonged 
to him and his investment never earned. It is equally plain 
that the time will come when new members will cease to join 
and the treasury will be empty and a large number of certifi- 
cate holders will not get a cent, although they have paid their 
dues and assessments just as promptly as their more lucky asso- 
ciates who have carried off the $200 each." 

The court refused to continue the incorporation of the 
company, which action was on appeal sustained by the Su- 
preme Court. 

Sec. 172. The United Indemnity Company of Los An- 
geles, California, conducted a business, the essential features of 
which were as follows: In consideration of a membership 
fee of $5 and monthly dues of $2, it entered into contracts 
with persons who desired to become members, purporting to 
be contracts of indemnity in case of sickness, accident or death 
and issued to them certificates containing the usual provisions 
of similar insurance policies. To each certificate were at- 
tached 50 coupons of $10 each, numbered consecutively, those 
on the first certificate from 1 to 50, those on the second from 
51 to 100 and so on indefinitely. The certificates were issued 
in the order in which applications were received by mail or 
otherwise and there was no means of knowing prior to the 
issue of the certificate how many had been previously issued 
nor what would be the numbers of the coupons attached to it. 
It was provided that one-half of the amounts received from 



206 Lotteries, Frauds and Obscenity in the Mails. 

monthly dues should constitute a so-called "maturity fund" 
and whenever there should be enough money in that fund to 
pay one or more coupons, coupons should be redeemed in the 
order of 1, 5 and so on, in geometrical progression with the 
multiple 5, until the highest numbered coupon was reached ; 
then returning to the coupon numbered 2, then 10, etc., in a 
second series with the multiple 5, and so on, until the numbers 
of all the coupons sold should be included in some series. It 
was also provided that at the end of three years each certifi- 
cate holder should receive the full amount paid in monthly 
dues ; at the end of five years $150 ; at the end of seven years, 
$300 ; and at the end of ten years, $500 ; and these payments 
were to be made out of the "maturity fund." One-fourth of 
the monthly dues constituted "the accident, sick and death 
fund," and one-fourth , together with the membership fees, 
constituted "the expense fund." It was also provided that 
any coupon maturing by the multiple system should have de- 
ducted from it any excess above double the amount of monthly 
dues paid thereon. 

This was, in U. S. vs. Fulkerson, 74 Fed. Rep. 619, held 
to be a lottery scheme. Judge Wellborn, speaking of what 
constituted a lottery in that case, said : "It may be sufficient 
to say it embraces the elements of procuring through lot or 
chance, by the investment of a sum of money or something of 
value, some greater amount of money, or thing of greater 
value. "When such are the chief features of any scheme, 
whatever it may be christened or however it may be guarded 
or concealed by cunningly devised conditions or screens, it is, 
under the law, a lottery." After quoting the language of Judge 
Deady in U. S. vs. Wallis, 58 Fed. Eep. 942, Judge Well- 
born continued: "The scheme provides that one-half of the 
total receipts of the company, outside of the membership fee 
of five dollars, shall constitute what is called a 'maturity fund/ 
which fund, as fast as accumulated, is re-distributed among 
the subscribers according to a plan characterized with as much 
uncertainty and chance as it is possible to impart to any 
scheme. It should be remembered, in this connection, that 



Lotteries, Frauds and Obscenity in the Mails. 207 

the 'maturity fund 7 is not put at interest or in any way invested 
but simply paid back, as fast as accumulated, to certain of the 
subscribers. This fact itself argues the existence of that gam- 
bling element which the law condemns, for no man, however 
absolutely he relied upon the ignorance and credulity of his 
intended dupes, would ever devise or promote a scheme, 
whereby persons are invited to raise, by voluntary subscrip- 
tions, a fund solely for the purpose of re-distribution among 
themselves, unless to each there was offered a chance of getting 
back something more than he contributed. The element of 
chance, however, is specifically and clearly discernible in the 
fact that the numbers of the coupons, which any particular 
person receives, depend upon the order in which his applica- 
tion goes into the company and that the determination of what 
coupons shall be paid is made to depend upon a device of num- 
bers whose operations are such that it is utterly impossible for 
anyone to know the result, until the same has been accom- 
plished. It is true no wheel is employed, from which at stated 
periods tickets are drawn, but the machinery of the scheme, 
embracing the postal establishment of the United States, is 
perpetually in motion and prizes, in the shape of so-called 
matured coupons, continually distributed to those who secure 
the lucky numbers." 

Sec. 173. The principle of the Bond Investment 
Schemes was, in one of its phrases, involved in the case of Mc- 
Lanahan vs. Mott, 73 Hun. 131, where it appeared that the 
North River Bridge Company, a corporation organized under 
an act of Congress, in order to raise money to build a bridge 
over the Hudson River from New York City to New Jersey, 
proposed to "issue $100,000,000 of bonds secured on its prop- 
erty, maturing four hundred and fifty years after date, with 
interest at 6 per cent per annum,payable 2 per cent semi-annu- 
ally, the remaining 2 per cent at maturity, with a provision 
that at each semi-annual payment of interest, $400,000 shall 
be used to redeem bonds, to be designated by the trustee, at 
their maturity value." And the supreme court, general 
term, New York City, holding the scheme to be a lottery, said : 



208 Lotteries, Frauds and Obscenity in the Mails. 

"It is not at all likely that the whole or any considerable 
part of an issue of $100,000,000 of bonds, in the denomination 
of $100 each, bearing interest at 4 or at 6 per cent, and having 
nearly five centuries to ran, and with no other property or 
security behind it at the date of issue than a mere mortgage 
on a franchise, would be marketable without some special in- 
ducement to purchasers; and that has been provided here. 
The redemption feature which holds out the hope to a pur- 
chaser of speedily obtaining ten-fold for his outlay, and, as it 
were, by the turning of a wheel or the casting of lots, is the 
real attraction. It defines the whole plan, stamping it with 
the character of a lottery, all the real qualities of which it pos- 
sesses. The element of selecting bonds for redemption is not 
of itself an objectionable feature. It is the chance of winning 
at an early drawing ten times the face value of a bond that 
constitutes illegality if there is any illegality in the scheme. 
There are various definitions of the word 'lottery' given in the 
books, no one of which includes each and every known or con- 
ceivable scheme that properly may be designated by the term. 
It would serve no useful purpose to refer to them here. Let 
it suffice that we are satisfied that the scheme of redemption of 
the bonds adopted by this corporation constitutes a 'lottery' 
in the popular as well as in the technical sense of the term, 
and that it is apparent that on that feature reliance is placed 
for finding a market for the bonds." 

And after quoting from Judge Blodgett's opinion in the 
Zeisler case, 30 Fed. Rep. 499, to the effect that the drawing 
not only determined when the bonds should be redeemed but 
determined also "certain extraordinary chances to the holders 
of the fortunate numbers drawn," the court added: "In the 
present case, one of the 'extraordinary chances' is that of a 
fortunate holder getting four hundred and fifty years' interest 
at 2 per cent in six months." 

Sec. 174. The only exception to this line of decisions 
on this class of cases is Union Investment Association vs. Lutz, 
50 111. App. Reps. 176. In that case it appeared that the As- 
sociation issued bonds in three classes, A, B, C ; in class A for 



Lotteries, Frauds and Obscenity in the Mails. 209 

$200, B $1,000, and C $500, for which subscribers in Class A 
paid $5 entrance fee and $5 monthly dues every month; Class 
B $10 entrance fee and $5 monthly dues ; and Class C $7 en- 
trance fee and $2 monthly dues. Seventy per cent of the 
money received was kept as a redemption fund ; ten per cent 
as an expense fund and twenty per cent was set apart for in- 
vestment. The bonds were paid out of the redemption fund in 
numerical order. The Court of Appeals of the First District 
of Illinois held that there was nothing contrary to law in this 
scheme. The Court said : "The scheme applies the principles 
of joint tenancy to the investments by the subscribers, the sur- 
vivorship depending upon default instead of death. It is the 
Tontine principle which Rapp applied in Harmony Society, 
which Gibson, C. J., speaking for the Supreme Court of Penn- 
sylvania, said was 'prohibited neither by statute nor the com- 
mon law.' Schriber vs. Rapp, 5 Watts, 351." In reference 
to the soundness of this decision it is enough to state that it is 
opposed to all the other cases and the case of Schriber vs. 
Rapp, 5 Watts, 351, cited by the court, does not support in the 
slightest degree the principle asserted. 

Sec. 175. While none of these Bond Investment 
Schemes, involving the lottery principle, has been before the 
Supreme Court of the United States, that court held in the 
Durland case, 161 IT. S. 35, that the scheme operated by the 
Provident Bond and Investment Company, of which Durland 
was president was a fraud within the meaning of section 5480, 
Revised Statutes, and the same court in U. S. vs. Horner cited 
with approval the English case of Sykes vs. Beadon, 11 Ch. 
Div. 170, which involved substantially the same principle, 
especially as to the prize feature. 

VOTING CONTESTS, NOT EOTTEKY SCHEMES. 

Sec. 175a. The Postoffice Department held that a con- 
test wherein a prize is offered to the most popular school 
teacher, the prettiest woman, the most popular farmer, etc., 

14 



210 Lotteries, Frauds and Obscenity in the Mails. 

the party receiving the prize to be designated by votes cast by 
his friends, each vote to be paid for, is not a lottery scheme, 
though it is difficult to uphold such ruling upon principle. 
There can be no doubt that some of these contests involved 
the element of wagering or gambling, that is the promoters' 
object was to make money and not simply to ascertain who was 
the most popular teacher, farmer, etc. It is certain, as ex- 
perience has shown, that as a money-maker, a contest of this 
character scarcely has a superior. It excites the participants 
to the highest degree and parties have been known to spend 
all the cash they had on hand and all they could borrow from 
their friends to buy votes for their favorites and the contests 
often end in accremonious bickering and complaints. But 
where the participants are present at the same place on the 
same occasion and the state of the voting is announced after 
each vote or where the contests are announced through news- 
papers and the state of the voting is given daily, it seems that 
each participant can control the result at his will. But where 
the state of the voting is not known during the contest there 
would seem to be an element of chance entering into the 
scheme because no participant in that case could know how 
much he would have to invest in order to win or when to stop 
voting. 

Sec. 175b. The Illinois statute (E. S., ch. 128, sec 53) 
prohibited "every lottery, scheme or device of chance." In 
Dion vs. St. John Baptist Society (decided in 1890), 19 Atl. 
Rep. 825, it appeared that the Society offered a gold watch to 
the person who should receive the largest number of votes at 
a church, each vote to be paid for, and selected two candidates 
who should make the race. The Court of Appeals of Illinois 
held that the scheme was not a lottery, saying: "The article 
is not drawn by any ticket nor by any person; the only possi- 
ble chance, if it can be called such, connected with the affair 
being whether one person's admirers or another's will give the 
most money to charity in order to obtain the prize for their 
favorite or friend, the affair usually arousing sentiment 
enough to render the game profitable. No contributor expects 



Lotteries, Frauds and Obscenity in the Mails. 211 

to get any personal benefit from his contributions, nor can he, 
beyond a mere sentimental enjoyment, unless he immodestly 
or clandestinely votes (pays money) for himself as the plaintiff 
avers he did and that would be an imposition upon the decen- 
cies of the occasion. From the nature of the plan, no one 
would attempt to carry it on for any private gain. There 
could be no motive to sustain it for any such purpose. It is 
impossible that all persons engaged in such a scheme are guilty 
of gambling and liable to imprisonment for it." 

LOTTERY SCHEMES. MISCELLANEOUS CASES. 

Sec. 176. In Jacobus vs. Hazlett, 78 111. App. Kep. 
29, the parties, differing as to the yield of wheat in a certain 
field, agreed that one of them should pay for the threshing of 
the whole crop and was to have all there was over 600 bushels 
which when threshed and measured turned out 874 bushels. 
Plaintiff brought suit for the recovery of 274 bushels of wheat 
being the excess over 600 bushels. This transaction was held 
to be a wager. The court said: "When the contract was 
made the number of bushels of wheat the field would yield was 
to the parties an unknown and uncertain event, upon which 
when ascertained, the one would lose and the other gain ; since 
if the yield of the wheat when threshed and measured was 
enough more than 600 bushels to more than pay for the thresh- 
ing of all of it, then the appellant would be the winner, if less 
the appellees would be the winners. This clearly brings the 
contract within the definition of a wager or bet, which is de- 
fined to be a contract by which two or more parties agree that 
certain sums of money or other things shall be paid or deliv- 
ered to one of them on the happening or not happening of an 
uncertain event. Bouvier's Law Dictionary, 14th Ed., 647 
and 648. It makes no difference, as to the right to recover 
in this case, that the parties clothed their bet or wager in the 
garb of an apparent contract for the sale of the 274 bushels of 
wheat, since it does appear that the effect of the real transac- 
tion was that appellant was to win if the field yielded more 



212 Lotteries, Frauds and Obscenity in the Mails. 

than enough wheat, above 600 bushels, to pay for threshing all 
of it and the appellees were to lose in case the yield was less." 
Sec. 177. In Loiseau vs. State, 22 South. Kep. 138, de- 
cided by the Supreme Court of Alabama, it appeared that sev- 
eral persons each dropped nickels into a slot machine, owned 
by defendant, agreeing among themselves that the one, after 
whose play the machine would indicate the highest card 
hand, should have all the cigars the nickels purchased. De- 
fendant furnished from his stock a nickel cigar for each nickel 
put into the machine and delivered them to the person who 
obtained the best hand. The Court, holding the scheme to 
be a lottery, says: "That the parties were guilty of gambling 
and were within the general law of the state is not seriously 
controverted, but it is contended that the slot machine, as op- 
erated, was not a lottery and that the legislature had authority 
to license such gambling. We are unable to assent to this con- 
clusion. Calling it by name a 'slot machine/ instead of a 
'lottery machine, 7 does not vary its character; nor does the 
fact that the parties agreed that the winner should receive 
the value of the money in cigars instead of money itself exert 
any influence in determining the character of the winning 
chance to have been by lot. The three parties agreed between 
themselves — to which the defendant, the owner and the setter 
up of the machine, was a party — that the highest cards, to be 
determined by the revolving of a wheel, should win the value 
of all the money in cigars to be furnished by the defendant, 
be taking the money. There have been many definitions of 
'lottery' by the decisions of the various courts, each generally 
made with reference to the particular case then under consid- 
eration ; and, as soon as rendered, the ingenuity of the gambler 
has gone to work to invent some way to avoid the effect and 
compass of the precise words used in the particular case. 
There may be gaming which is not by lot but in every prohib- 
ited lottery there is an element of gambling. The constitu- 
tional provision is that 'The General Assembly shall have no 
power to authorize lotteries/ Lot has been defined to be 'a 
contrivance to determine a question by chance, or without the 



Lotteries, Frauds and Obscenity in the Mails. 213 

action of man's choice or will.' * * * When small 
amounts are hazarded to gain large amounts and the result of 
winning is to be determined by the use of a contrivance of 
chance, in which neither choice nor skill can exert any effect , 
it is gambling by lot, or a prohibited lottery. * * * The 
legislature has no authority to authorize the licensing of a slot 
machine to be used as the evidence shows it was used in the 
present case. * * * "Whatever may be the name or char- 
acter of the machine or scheme, if, in its use, a consideration 
is paid and there is gambling, the hazarding of small amounts 
to win larger, the result of winning or losing to be determined 
by chance, in which neither the will nor skill of man can oper- 
ate to influence the result, it is a determination by lot. * * 
If there is anything to the contrary in Buckalew vs. State, 62 
Ala. 334, it must be regarded as modified to conform to what 
is here declared." 

Sec. 178. Where it appeared from the evidence that the 
accused maintained a slot machine so contrived that if one 
dropped a nickel in the slot therein he would either lose the 
nickel or win fifty cents and the object and purpose of the 
accused in maintaining the machine was to win money in this 
manner, he was held to be guilty of operating a lottery 
scheme. Kohlshorn vs. The State, 97 Ga. 343. 

And it was also held in this case such a machine could 
not be treated as one kept "for amusement only." 

Sec. 179. In Buckalew vs. State, 62 Ala. 334, it was 
held, that where money was put on a round table in equal 
amounts by several persons, each in turn whirling a hand, fas- 
tened in the center, the one, at whose whirl the hand regis- 
tered the highest number on the rim of the board, taking all 
the money on the board, the promoter sometimes putting up 
money and sometimes charging a small sum for the use of the 
board to be paid by the winner, the scheme was not a lottery 
but gaming. 

Sec. 180. In People vs. Payne, 3 Denio, 88, it was held 
that the object of the I\ T ew York. Statute then under review 
was to prevent gambling or gaming for some valuable thing: 

S 



214 Lotteries, Frauds and Ohscenity in the Mails. 

and not to punish a lottery made or drawn for mere amuse- 
ment, or the determination by lot of some matter involving no 
right of property. 

Sec. 181. In Chavannah vs. The State, 49 Ala. 396, 
the defendant operated a wheel on which were numbers. He 
sold a dozen "paddles" on which were numbers to correspond 
with the numbers on the wheel. The conductor revolved the 
wheel and when it stopped, the number, at which a spring 
indicator (attached to the device) pointed, won ten times the 
amount paid for it, being the amount paid for all the "pad- 
dles" less twenty per cent, which went to the operator. 

The Court said: "The transaction represented in the 
evidence is evidently a game of chance. The good or bad 
fortune of the party making the risk did not depend upon any 
skill of the player in control of the event which entitled him 
to win. That depended wholly on lot or chance. Lot is de- 
fined to be 'a contrivance to determine a question of chance 
without the action of man's choice or will.' When such a 
contrivance is applied to gaming where the chances are sold 
before the game is played, it is a lottery under our Criminal 
Code. Eev. Code, S. 3616; 2 Bish. Cr. L. S. 469; Bell vs. 
The State, 5 Sneed, 507. It is true that the manager did not 
determine the chance by putting his hand into a box or wheel 
and drawing out a prize or blank. * * * These 'pad- 
dles' which represented chances were sold to the player in 
lieu of lottery tickets as used in a regular lottery. When the 
wheel stopped the fixed index attached to the machine pointed 
to some number on the face of the wheel. If the number, 
thus shown by the index, corresponded with the same number 
on the paddle sold, the holder of the paddle won — if it did not 
he failed. Such a performance, when a small sum of money 
is ventured for the chance of obtaining a greater sum, is car- 
rying on a lottery. * * * It may be somewhat nonde- 
script and may not yet have received a name by which it can 
be definitely registered in the catalogue of games yet it has all 
the essentials of a lottery and it is forbidden by our statute." 

Sec. 182. In Com. vs. Wright, 137 Mass. 250, it was 



Lotteries, Frauds and Obscenity in the Mails. 215 

held that, where a party chose a number and paid a certain 
sum and the seller drew an envelope from a box full, contain- 
ing a slip with numbers on it and if the number chosen was on 
the slip the buyer received a multiple of the sum paid, 
greater or less according to the agreement and if not, he lost 
what he had paid, was a lottery. 

The Court said: "The event is none the less uncertain 
that the charces of the event are certain. The chances only 
represent the average of a long series of events. * * * 
The event does not appear to have been even mechanically 
certain, as the selecting of the envelope seems to have been 
made arbitrarily after payment. But if the choice of the num- 
ber had also fixed the envelope, so long as the event could not 
be predicted by the party concerned, it would be uncertain 
and depend on chance in the only sense which the law has to 
take into account. 

Perhaps it is a little more difficult to show how the game 
is more than a wager. A bet, however, is usually executory 
on both sides, isolated and determined by events independent 
of the action of the parties while in this game a price is paid 
for the chance of a prize and it is determined by a mechanical 
device worked by the manager of the game according to a 
scheme held out to the public whether he who pays the money 
is to have the prize or nothing. It may be that the differ- 
ence between this and a single wager on the cast of a die is only 
one of degree; but, if so, the difference is sufficiently marked 
to warrant the finding of the jury. We can not say, as a mat- 
ter of law that the fact that the prize was money and not spe- 
cific and that more than one could select the same number with 
the same result prevented the game from being a lottery. It 
is a lottery according to the popular use of the word as shown 
by the dictionaries, according to history, to which lotteries 
with money prizes not specific have long been known, and ac- 
cording to the course of the decisions." 

Sec. 183. Two parties met on Sunday and one of them 
said he believed he would raffle off his dwelling house and lot 
by chances, stating the chances to be 500 at a specified valu- 



216 Lotteries, Frauds and Obscenity in the Mails. 

ation. The other party replied that he would take all the 
chances, and it was agreed that the deed should be made next 
day and they put up their watches as a forfeit to stand by the 
proposition as made and accepted This was held not to be 
a lottery scheme in Thornhill vs. O'Bear, 31 L. E. A. 782; 108 
Ala. 299. 

Sec. 184. Where clubs of 40 persons each were formed by a 
merchant tailor for the disposition of suits of clothing, each of 
the stipulated value of $40, by lot under nominal contracts of 
purchase, the price to be paid in weekly instalments of $1 
each, such payments entitling the holders of tickets to partic- 
ipate in weekly drawings by lot with a chance of receiving 
goods of the value of $40 at any drawing without further addi- 
tional payments than the weekly instalments paid, the scheme 
was held a lottery within the statute of Minnesota by the Su- 
preme Court of that state, in State vs. Moren, 48 Minn. 555. 
A provision in the contract that each member of the club 
should eventually receive a suit of clothes when he should have 
paid $40, if not previously drawn, or that he might withdraw 
at any time and receive "the value of money paid in on said 
contract in merchant-tailoring" does not make the scheme any 
the less a lottery or take it out of the operation of the statute. 
The sale of each ticket gave the purchaser a chance to obtain 
something more than he paid in. The Court held that this 
provision "would probably operate only as an additional in- 
centive to purchase coupons in aid of the lottery scheme. 77 
The Court said: "They (the coupons) were not bought in order 
to get their face value in goods. The vicious element still in- 
heres in the transaction. Patrons come into it with the hope 
and chance of winning a $40 suit by lot for the price of a Cou- 
pon. The sale of the ticket gave the purchaser the chance to 
obtain something more than he paid and that became an extra 
inducement for the purchaser. IT. S. vs. Olney, 1 Abb. 
(U. S. 275 ; Regina vs. Harris, 10 Cox Grim. Cas. 352. The 
term 'lottery' has no technical meaning, but under the statute 
it must be construed in a popular sense and with the view to 
remedy the mischief intended to be prevented. The statute 



Lotteries, Frauds and Obscenity in the Mails. 217 

is intended to reach all devices which are in the nature of lot- 
teries, in whatever form presented; and the Courts will toler- 
ate no evasions for the continuance of the mischief. It de- 
clares and defines a lottery to be a scheme for the distribution 
of property by chance among persons who have paid or agreed 
to pay a valuable consideration for the chance, whether called 
a lottery,' 'raffle,' or 'gift enterprise,' or by some other name." 

Sec. 185. The Postoffice Department has gone farther 
than this case goes. It has held that a scheme of the charac- 
ter described in the Moren case is a lottery though each ad- 
venturer be required to pay his periodical dues after he draws 
his suit of clothes or other thing provided for by the scheme 
until the end of the stipulated period, on the ground that the 
benefits, which are determined by chance, are unequal. It is 
true that all the adventurers are required to pay the same 
amount and are to receive an article of the same kind and 
value but those who receive the article first have an advantage 
over the others, in two respects: 1, they have the use of 
the article first; and, 2, they may from one cause or another 
fail to pay their dues after they have drawn their prizes. It 
is true the advantage in drawing the article first is slight but 
that makes no difference, so far as the principle of a lottery 
is concerned ; and this advantage must be regarded as valuable 
or the adventurers would not otherwise enter into any such a 
scheme. 

Sec. 186. Defendant owned and operated a device con- 
sisting of a circular board, in the center of which was an ar- 
row turning on a pivot, pointing to numbers around the edge 
of the board. Opposite each number was placed an article of 
jewelry or a sum of money in value from 5 cents to $1. One 
having paid ten cents for the privilege of whirling the arrow 
was entitled to the prize opposite the number on which it 
stopped. Held a lottery. Beeves vs. State, Feb'y 9, 1895, 
Sup. Ct. Ala. 17 South. 104. 

. Cases cited: Buckalew vs. State, 62 Ala. 334; Yellow- 
stone Kit vs. State, 88 Ala. 196, and Bell vs. State, 5 Sneed, 
-507. 



218 Lotteries, Frauds and Obscenity in the Mails. 

Sec. 187. The scheme, operated in Fleming and Nev- 
ill ts. Bills, 8 Oregon, 286, was this: A box was divided into 
compartments numbered from 1 to 48, some. of which con- 
tained prizes; others were empty or blank. The game was 
played by means of eight dice thrown by the person, who chose 
to pay the specified sum for the chance of winning. The per- 
son, throwing a number corresponding with a number of a 
compartment containing a prize, became entitled to the prize 
contained therein; otherwise he received nothing. Fleming 
and Nevill claimed that this scheme was not a lottery : First, 
because the person paying the money cast the lot ; and second, 
a scheme or game is not a lottery unless all the ticket holders 
taken collectively have a certainty that some one or more of 
their number will gain the prize or prizes; and in support of 
these contentions they relied on the definition of a lottery 
given by Mr. Bishop, 2 Bishop Cr. L., sec. 496. 

The Court overruled these contentions and held the 
scheme a lottery. The court quoted from the American Cy- 
clopaedia as follows: "Two kinds of lottery may be distin- 
guished, the Genoese or numerical and the Dutch or Class lot- 
tery" and then added : "This work describes the former as 
a scheme by which out of ninety consecutive numbers five are 
to be selected or drawn by lot. The players fixed upon cer- 
tain numbers, wagering that one, two or more would be drawn 
among the five or that they would appear in a certain order." 
Of the Dutch or Class Lottery the author says: "In this spe- 
cies the number and value of the prizes are regularly esti- 
mated, all the ticket holders are interested at once in the play, 
and chance determines whether a prize or blank shall fall to a 
given number." The court then goes on to hold that it is not 
necessary in a lottery patterned after the Genoese System that 
there should be tickets or ticket holders, or that a given num- 
ber of chances should be taken or that the holders of chances 
should have a certainty that a prize would be gained by one 
or more of their number, or that more than one at a time 
should bet or wager money or that the promoter should cast 
the lots. 



Lotteries, Frauds and Obscenity in the Mails. 219 

Sec. 189. In State vs. Grimes, 52 K W. Eep. 42, de- 
fendant was charged with keeping a gambling device called 
a "stock clock." This machine was constructed so as to be 
wound up. Cards, marked so as to represent certain kinds of 
railroad or other stock, were placed in it. The customer 
would invest a sum of money and name the stock he wanted 
to bet on. The machine was then set in motion and if the 
card with the stock selected by the customer marked on it 
came out, the customer won half as much as he had invested, 
otherwise he lost half as much as he had invested. "In short," 
remarked the Michigan Supreme Court, "the customer was 
betting on which way the clock would force a particular card 
and this depended entirely on chance. Portis vs. State, 27 
Ark. 362." The Court further said: "The case of State vs. 
Shaw, 39 Minn. 153, 39 K W. 305, relied on by counsel for 
the defendant, is not in point. While the lists and boards 
containing the names of horses that were to be run might fur- 
nish information to those who wished to gamble by betting on 
the races, yet they had nothing to do with determining the 
result. But, in this case, the element of chance depended 
upon the movements of the clock itself." 

Sec. 190. The evidence in United States vs. Politzer, 
59 Fed. Eep., showed that the defendant was agent for the 
sale of certain European Government premium bonds which 
were very much alike, and which included Austrian Govern- 
ment Bonds of 1860; Brunswick Bonds of 1868, 1869; Italian 
Eed Cross Bonds of 1885; Bucharest Bonds of 1869 and Hun- 
garian Eed Cross of 1883. The circulars issued by defendant 
stated th#t drawings for the redemption of these bonds would 
take place at stated times and that certain prizes to be deter- 
mined by drawings would be awarded to the holders of some 
of the bonds redeemed. Judge Morrow of the United States 
District Court for the Southern District of California, in De- 
cember, 1893, in charging the jury in this case, held that all 
the above named bonds came within the principle laid down 
by the Supreme Court in the Horner case. 



220 Lotteries, Frauds and Obscenity in the Mails. 

Sec. 191. The Horner case, 147 U. S. 449, is the leading 
authority in the United States on the subject of lotteries in 
general but more especially on the construction of the Anti- 
Lottery Acts of Congress. In that case Horner was indicted 
for advertising a lottery through the mails. The scheme 
he advertised was this: The Government of Austria, in 
1864, issued bonds of one hundred guldens each, aggregating 
40,000,000 gulden for the purpose of raising revenue for the 
Government in order to defray governmental expenses and 
carry on general state affairs and which were to> be redeemed 
from revenues to be thereafter raised by taxation. The bonds 
were to be redeemed at the end of fifty-five years but the Gov- 
ernment agreed to pay, in the meantime, during the first year 
as the minimum amount for any bond 135 gulden; during the 
second year 145 gulden; and so on increasing 5 gulden in 
amount in each year, until the minimum amount, to be paid 
on each bond redeemed, was 200 gulden. The plan of re- 
demption of the bonds, prior to the maturity period of fifty- 
five years, was set forth on the back of each bond and by it 
each bond belonged to a distinct series the number of which 
was on the face of the bond, together with the number of the 
bond in that series. In order to determine what bonds should 
be paid and at what time and what amount was to be paid on 
each of them respectively, it stated on the backs of bonds that 
until April, 1874, there were to be five drawings a year, on 
certain dates ; that thereafter, and until the end of the nine- 
teenth year from the date of issue of the bonds four drawings 
a year were to take place at stated times; that thereafter to and 
including the thirty-first year three drawings a year were to 
take place and that thereafter to and including the fifty-fifth 
year after the date of the issue of the bonds two drawings a 
year were to take place. 

Several controverted questions were raised in this case 
and disposed of by the court which may be summarized as fol- 
lows: 

First. Whoever purchased a. bond at the same time pur- 
chased a chance in a lottery or similar enterprise, offering 



Lotteries, Frauds and Obscenity in the Mails. 221 

prizes dependent upon lot or chance. In other words the 
money paid was a consideration for a chance for a prize as well 
as for a bond. 

Second. That, according to the scheme, there was an 
element of certainty, that is the certainty that each investor 
would have returned to him what he paid in, with interest, 
which went hand in hand with an element of lot or chance, 
that is the chance of drawing one of the prizes offered and that 
the former did not destroy the existence or effect of the latter. 

Third. That a so-called gift concert, as that term is 
used in the act of Congress, has in it also an element of certainty 
and an element of lot or chance and that the transaction em- 
bodied in the bonds in question was a similar enterprise to 
lotteries and gift concerts. 

Fourth. A lottery, authorized by one Government, may 
be forbidden by another and although it was true that the 
Austrian Government bonds were vendible and ought to be 
treated as other articles of commerce, yet when these bonds 
were coupled with conditions and stipulations, which changed 
their character from simple Government bonds for the pay- 
ment of a certain sum of money to a species of lottery ticket, 
which falls under the condemnation of our statutes, they 
should be classed as their conditions characterize them, and 
then they were not vendible, and to prohibit their sale did not 
violate any constitutional provision or treaty stipulation. 

Fifth. The fact, that each investor would have returned 
to him all the money, that he paid, with interest, so that there 
could be no final loss, did not deprive the scheme of its evil 
tendency*nor rob it of its lottery semblance and features. 

Sixth. That the court is not justified in deciding a thing 
is not a lottery, simply because there can be no loss when there 
may be large contingent gains, simply because it lacks some 
element of a lottery according to some particular dictionary's 
definition of one, where it has all the other elements with all 
the pernicious tendencies which the Government is seeking to 
prevent. 



222 Lotteries, Frauds and Obscenity in the Mails. 

These rulings of the court are in direct conflict with 
the opinion of the Court of Appeals of New York, in Cohn vs. 
Koehler, 96 N. Y. 362, and the opinion of the Supreme Court 
of California in Ex parte Shobert, 70 Cal. 632. The 
court seemed to think the Court of Appeals of New 
York was induced to hold that the bonds in question did not 
constitute a lottery scheme, because the Statute of New York, 
then under review, simply authorized the recovery of money 
invested in an illegal lottery, and as the bonds were authorized 
by law, they were not illegal. 

The court cited, with approval, the American cases of the 
Commonwealth vs. Chubb, 5 Kandolph, 715; Dunn vs. The 
People, 40 111. 465; Thomas vs. The People, 59 111. 160; 
Chavannah vs. The People, 49 Ala. 396; Commonwealth vs. 
The Sheriff, 10 Phila. Kep. 203; Holman vs. State, 2 Texas 
App. 610; State vs. Lumsden, 89 N. C. 572 and Common: 
wealth vs. Wright, 147 Mass. 250 and the English cases of 
Eeg. vs. Harris, 10 Cox, C. C. 352; Sykes vs. Beadon, 11 Ch. 
D. 170 and Taylor vs. Smetton, 11 Q. B. D. 207. 



LOTTERIES AND THE PUBLIC 
PRESS. 

Sec. 192. The jealous pride of the American people in 
the freedom of the Press prevented for many years the inser- 
tion of any provision in the Anti-Lottery legislation of Con- 
gress prohibiting newspapers from publishing lottery notices. 
Under this legislation as it stood from 1872 to 1890 it was 
held by the Postoffice Department that a newspaper could not 
be excluded from the mails on the ground that it contained 
notices of lotteries drawn or to be drawn. But experience, 
having demonstrated that lottery schemes were extensively and 
persistantly advertised through the Press to the detriment of 
the public and private morals of the people, the following 
sweeping provision was inserted in the Act of September 19, 
1890; "nor shall any newspaper, circular, pamphlet or publica- 
tion of any kind, containing any advertisement of any lottery 
or gift enterprise of any kind, offering prizes dependent upon 
lot or chance, or containing any lists of prizes at the drawing 
of any such lottery or gift enterprise, whether said list is any 
part or all of the drawing, be carried in the mail or be delivered 
by any postmaster or letter carrier." When the Postoffice 
Department undertook to enforce this provision there was great 
opposition raised by a certain class of newspapers and publica- 
tions, based chiefly on the contention that the law was in 
violation of the provision of the Federal Constitution guar- 
antying the freedom of speech and of the press, nor did this 
opposition cease until the Supreme Court of the United States 
definitely and conclusively held the Act constitutional in the 
Jackson, Horner and Rapier Cases. These cases left no room 
for further doubt or discussion and, with rare exceptions, the 

223 



224 Lotteries, Frauds and Obscenity in the Mails. 

Press of the whole country gave up the fight and has become 
a great bulwark of the law itself. 

The law is very plain in its provisions. It includes 
"any newspaper, circular, pamphlet or publication of any 
kind." There could be and there has been no controversy 
about this provision. There has, though, been some contro- 
versy in regard to the clause which follows, "containing ad- 
vertisements of any lottery or gift enterprise of any kind * * * 
or any lists of prizes at the drawing of any such lottery or gift 
enterprise, whether said list is any part or all of the drawing." 

Sec. 193. When a scheme is advertised the first question 
presented for determination is whether it is a lottery, etc., or 
not. It has been found in practice, that the advertiser of a 
lottery scheme, especially when he gets good pay for it, is as 
much dissatisfied with an adverse ruling as the promoter and 
as many enterprises lie along the border land of doubt, this 
question has often been before the Department. 

Lottery promoters sometimes couch the advertisement of 
their schemes in such general or ambiguous terms that it is 
vigorously insisted by the publisher that the law has not been 
violated. But the Department looks to the intent and not to 
the form of the advertisement. If it be plain that the object 
is to give notice of a lottery scheme or the drawing of prizes 
or where and how the promoter may be found and addressed, 
the paper containing the advertisement is excluded from the 
mails no matter how adroitly or ingeniously it may be con- 
structed. 

The press at first generally claimed the right to "give the 
result of drawing of lotteries, as news items, without pay from 
the promoter or other person. But the result of a drawing, 
given as a news item in a newspaper, was found to be more 
pernicious than h regular advertisement and papers containing 
such items, whether paid for or not, were excluded from the 
mails. This point also has been yielded and this phase of the 
question is seldom presented for decision at this time. 

Sec. 194. It should be observed that the law forbids the 
advertisement of the full list or Dart of the list of a lottery 



Lotteries, Frauds and Obscenity in the Mails. 225 

drawing. This forbids the announcement by a newspaper of 
the drawing of a prize by any individual, whether it be drawn 
at a church raffle, or an avowed lottery like the Hondurous 
Lottery. To the publisher of a newspaper and especially of 
a country newspaper here is the greatest temptation. Some 
citizen, probably a well known citizen and personal friend of 
the owner of the publication, draws a prize in some regular 
lottery or at some charitable entertainment and the whole 
community would be interested to know the fact as a matter 
of current news, but the law forbids its publication and the 
publisher can not afford to give it in his columns and thus run 
the risk of having his paper denied carriage in the mails. 

Sec. 195. Another and probably the most important 
question that has come before the Postomce Department for 
decision in this connection is as to how far a newspaper pub- 
lisher or pamphleteer may go in giving information in regard 
to a lottery scheme in order to cripple, injure or destroy it. 
Of course much care is required at this point for it has been 
found that the promoters of lottery schemes are often willing 
to pay and do pay large sums of money to newspapers to 
devote much space, not only in the advertising but also in the 
editorial columns, devoted to a denunciation of the schemes 
and of their promoters; but whenever it has been found that 
the publisher of a paper, circular or pamphlet was sincere in 
his opposition to lotteries and his denunciations were not paid 
for but were voluntary on his part and were intended by him 
to suppress the particular scheme involved, as well as lottery 
gambling in general, the paper or pamphlet has been allowed 
access to Jthe mails though the public derived information from 
it in regard to the particular lottery and its promoters, which, 
under other conditions, would have made the publication non- 
mailable. In one case a lottery promoter published in pamph- 
let form the opinion of the Supreme Court, which contained 
the full details of his scheme and where and by whom operated 
but the Department promptly excluded the pamphlet from the 

15 



226 Lotteries, Frauds and Obscenity in the Mails. 

mails on the ground that its object was obviously to advertise 
the scheme, and not to cripple or destroy it. 

Sec. 196. The Department has sometimes been in doubt 
as to what disposition to make of newspapers, circulars or 
pamphlets containing unauthorized advertisements of lotteries 
and lottery drawings when found in the mails. Subdivision 8 
of section 31, P. L. and R. 1893, referring to newspapers, 
pamphlets and publications of all kinds, provides: "Post- 
masters should refuse to receive them from the publishers or to 
deliver them if by inadvertence they reach the office of destina- 
tion. When found by postmasters in the mail in transit, they 
should be held until a report concerning them can be made to 
the Postmaster-General and instructions received from him as 
to the disposing of them." 

Sec. 197. Ordinarily the Department, when, it finds a 
newspaper in the mails which concerns a lottery scheme, di- 
rects the postmaster to notify the publisher to take it out of the 
office and if it be not taken out after a reasonable time to 
destroy it and to destroy pamphlets and circulars without no- 
tice to anyone. The reason for this distinction in favor of a 
newspaper is that the notice of the lottery is simply incidental 
and may be cut out and the paper remailed to its patrons who 
have a property interest in it and besides this the notice may 
have been inserted inadvertently ; while there can be no object 
in a lottery circular or pamphlet except to advertise the lottery 
and the expunging of the illegal matter would make the 
circular or pamphlet of no value and its remailing after being 
thus expurgated would not be desired. The newspaper is 
valuable without the lottery advertisement, while the circular 
and pamphlet are valuable only because of such advertisement. 



CHAPTEE IV. 

SCHEMES OR ARTIFICES TO DEFRAUD. 

Sec. 198. Congress, as early as 1827, prohibited post- 
masters from acting as lottery agents (4 Stat. L. 238, Sec. 6); 
and again in 1868 declared by statute (15 Stat. L. 194, 
Sec. 13), matter concerning lotteries nonmailable, but the first 
law forbidding transmission through the mails of correspond- 
ence concerning schemes to defraud was that of June 8, 1872. 
(17 Stat, L. 283). 

Section 149 of the Act which was carried into the Re- 
vised Statutes as section 3894 is copied in section 6 of this 
work. 

Section 301 of the Act of 1872, which was carried into 
the Eevised Statutes as section 5480, was amended by the Act 
of March 2, 1889. (25 Stat. L. 873). The original section, 
with the language inserted by this amendment in brackets, is as 
follows : 

"If any person having devised or intending to devise any 
scheme or artifice to defraud [or to sell, dispose of, loan, ex- 
change, alter, give away, or distribute, supply, or furnish, or 
procure for unlawful use any counterfeit or spurious coin, bank 
notes, paper money, or any obligation or security of the United 
States or of any State, Territory, municipality, company, cor- 
poration, or person, or anything represented to be or intimated 
or held out to be such counterfeit or spurious articles, or any 
scheme or artifice to obtain money by or through correspond- 
ence by what is commonly called the 'sawdust swindle,' or 
'counterfeit money fraud/ or by dealing or pretending to 

227 



228 Lotteries, Frauds and Obscenity in the Mails. 

deal in what is commonly called 'green articles/ 'green coin/ 
'bills/ 'paper goods/ 'spurious Treasury notes/ 'United 
States goods/ 'green cigars/ or any other names or terms 
intended to be understood as relating to such counterfeit or 
spurious articles] , to be affected by either opening or intending 
to open correspondence or communication with any person, 
whether resident within or outside the United States, by means 
of the Postoffice Establishment of the United States, or by 
inciting such other person [or any person] to open communica- 
tion with the person so devising or intending, shall, in and for 
executing such scheme or artifice, or attempting so to do, place 
[or cause to be placed] any letter, packet [writing, circular, 
pamphlet, or advertisement] in any postoffice, branch post- 
office, or street or hotel letter box] of the United States [to be 
sent or delivered by the said Postoffice Establishment] , or shall 
take or receive any such therefrom, such person so misusing 
the Postoffice Establishment shall, upon conviction, be pun- 
ished by a fine of not more than five hundred dollars or by 
imprisonment for not more than eighteen months, or by both 
such punishments (at the discretion of the court). 

The indictment, information, or complaint may severally 
charge offenses to the number of three, when committed within 
the same six calendar months, but the court thereupon shall 
give a single sentence, and shall proportion the punishment 
especially to the degree in which the abuse of the Postoffice 
Establishment enters as an instrument into such fraudulent 
scheme and device.' 7 

The balance of the Act of March 2, 1889, is as follows: 
"That any person, who, in and for conducting, promot- 
ing, or carrying on, in any manner by means of the Postoffice 
Establishment of the United States, any scheme or device 
mentioned in the preceding section or any other unlawful 
business whatsoever, shall use or assume or request to be ad- 
dressed by any fictitious, false, or assumed title, name, or ad- 
dress, or name other than his own proper name, or shall take 
or receive from any postoffice of the United States any letter, 
postal card, or packet, addressed to any such fictitious, false. 



Lotteries, Frauds and Obscenity in the Mails. 229 

or assumed title, name, or, address, or name other than his 
own lawful and proper name, shall, upon conviction, be pun- 
ished as provided in the first section of this act. 

That the Postmaster-General may, upon evidence satis- 
factory to him that any person is using any fictitious, false, or 
assumed name, title, or address in conducting, promoting, or 
carrying on, or assisting therein, by means of the Postoffice 
Establishment of the United States, any business, scheme or 
device in violation of the provisions of this act, instruct any 
postmaster at any postomce at which such letters, cards or 
packets, addressed to such fictitious, false, or assumed name 
or address may arrive, to notify the party claiming or receiv- 
ing such letters, cards, or packets, to appear at the postomce 
and be identified, and if the party so notified fail to appear 
and be identified, or if it shall satisfactorily appear that such 
letters, cards, or packets, are addressed to a fictitious, false, or 
assumed name or address, such letters, postal cards, or pack- 
ages shall be forwarded to the Dead Letter Office as fictitious 
matter. 

That all matter, the deposit of which in the mails is by this 
act made punishable, is hereby declared nonmailable ; but noth- 
ing in this act shall be so construed as to authorize any person 
other than an employee of the Dead Letter Office, duly au- 
thorized thereto, to open any letter not addressed to himself. 

That whenever the Postmaster-General is satisfied that 
letters or packets sent in the mails are addressed to places not 
the residence or business address of the persons for whom they 
are intended, to enable such persons to escape identification, 
he may (Jirect postmasters to deliver such letters only from the 
postoffice upon identification of the persons addressed." 

Sec. 199. Aside from the identification clause in the 
Act of March 2, 1889, very little practical work has been done 
or can be done to prevent a promoter of a fraudulent scheme 
from assuming a fictitious name to consummate his fraud, for 
it is so common for honest men to do business under a corporate 
or partnership name or a name other than their own that it is 
usually impracticable for the Postoffice Department to take 



230 Lotteries, Frauds and Obscenity in the Mails. 

action against a party simply because he does not do business 
in bis own name and the Department must look to the scheme 
itself to ascertain if it be fraudulent or not. If it be found to 
be legitimate the name under which it is operated is immaterial 
and if it be found to be a fraud then the promoter is denied 
the use of the mails, not so much because he uses a fictitious 
name, as because he is operating a scheme, which the Depart- 
ment finds is fraudulent. But under the Statute the Post- 
master-General may, when he has reason to believe that a 
party is conducting a fraudulent scheme through the mails or 
is having his mail matter sent to a place not his residence, 
require the addressee to appear and identify himself as the 
proper party to receive the matter and in this way many 
swindlers have been caught and in many more cases the swind- 
lers have failed to appear for identification and hence the 
matter addressed to them was destroyed or was sent to the 
Dead Letter Office and was there properly disposed of, ac- 
cording to its nature. 

But in Wilson vs. Pearson, 13 Fed. Rep. 386, the court 
held that a postmaster is bound to give his reasons for believ- 
ing that a fictitious address is being used to cover matter not 
allowed to be carried in the mails in order that the parties may 
meet the issues made. 

The court said: "The postmaster is not authorized by the 
regulation to exercise an arbitrary judgment; he is only to 
require proof of identity when he has reason to believe that the 
mails are being used illegitimately. His judgment may be 
founded upon circumstances with which the owner of the let- 
ters has no connection, and unless some circumstances exist 
which call for the exercise of his judgment, his action is not 
within the protection of the regulation." 

Sec. 200. There was some question at one time whether 
the amendment of section 5480 by the Act of 1889 changed 
the meaning of the original section so as to limit it to the cases 
enumerated in the latter act. This question has, however, been 
definitely and conclusively settled by the Supreme Court of 
the United States. 



Lotteries, Frauds and Obscenity in the Mails. 231 

In Streep vs. United States, 160 U. S. 126, that court, 
construing this statute, said: "The Statute, in very words 
as well as in manifest intent, applies to any person who devises 
either a scheme to defraud or a scheme to sell counterfeit 
money or counterfeit obligations of the United States, provided 
the scheme is intended to be effected and is effected by com- 
munications through the mails." 

And to the same effect is the decision in U. S. vs. Sauer, 
88 Fed. Kep. 249. 

Sec. 200a. In the enforcement of this statute the most 
important question that has arisen is as to the nature of "any 
scheme or artifice to defraud" as used therein. In the defense 
of certain schemes it has been contended before the Postofnce 
Department and before the courts that a scheme or artifice to 
defraud, to come within the terms of the Act, is nothing more 
nor less than the well known crime of obtaining money or 
property under false pretenses, which could be committed only 
by the misrepresentation of an existing or past fact and not 
by a false promise to do something in the future. 

In meeting this contention the different phraseology in 
relation to this subject found in the various sections of the 
Act of 1872 should be noted. Section 149, (Ante Sec, 6), 
after forbidding the use of the mails to conduct a lottery 
scheme, proceeds to forbid their use for the operation of 
"schemes devised and intended to deceive and defraud the 
public for the purpose of obtaining money under false pre- 
tenses and section 300 which was carried in to the Revised 
Statutes, as sections 4041 and 3929, after authorizing the 
Postmaster-General to issue fraud orders against parties operat- 
ing loftery schemes through the mails, provides for the issue 
of fraud orders against anyone found to be conducting "any 
other scheme or device for obtaining money or property of any 
kind through the mails by means of false or fraudulent pre- 
tenses, representations or promises," while sections 5480 uses 
the general words "any device or artifice to defraud." All 
these sections, being component parts of one and the same act, 
must be construed together and made to harmonize if possible. 



232 Lotteries, Frauds and Obscenity in the Mails. 

In U. S. vs. Saner, 88 Fed. Eep. 249, Judge Severens held 
that the words relative to fraudulent schemes in section 149 
(3894, E. S.) embraced only schemes in the nature of a lottery. 
This may be doubted but it is a question of little importance 
in the practical administration of the law. It is clear that 
section 300 (sections 3929 and 4041, E, S.), relates to the 
fraudulent schemes interdicted by section 301 (section 5480, 
E. S.), as well as the lottery schemes mentioned in section 
149 (section 3894, E. S.). It is manifest that the writer of 
these sections, as they appeared in the act of 1872, had no well 
defined conception of the offense which it was intended should 
not be conducted through the mails and that the same language 
has been retained in the subsequent acts because it was found 
in the sections of the original Act. 

Conceding that Judge Severens is correct in his inter- 
pretation of section 149 (section 3894, E. S.), we have left 
sections 300 and, 301 (sections 5, 3929 and 4041, E. S.) 
which in their relation to fraudulent schemes must be recon- 
ciled if possible. The only way to do this is to construe the 
language of section 300 as defining what is meant in section 
301 by the words "scheme or artifice to defraud." If that 
be true the definition of the offense would be "any scheme or 
artifice to defraud by means of false or fraudulent pretenses, 
representations or promises." 

Taking all this legislation together it is apparent that 
Congress intended to strike principally at schemes devised to 
defraud the public in general. Section 5480 created a new 
offense and that was to devise a scheme or artifice to defraud 
to be effected through the Postoffice Establishment. By the 
express terms of the section the crime may consist in simply 
devising a scheme to defraud to be effected through the mails, 
and in the execution of the scheme depositing a letter in a post- 
office, without having reached the point of having made false 
or fraudulent representations or promises, the bare intent to 
defraud in the future by means of the scheme or artifice being 
sufficient. This has been the uniform construction put on 
these statutes by the Postmaster-General. January 4, 1883, 



Lotteries, Frauds and Obscenity in the Mails. 233 

the Assistant Attorney-General for the Postoffice Department 
gave an opinion to the Hon. T. 0. Howe, the then Postmaster- 
General in which he used this language: "In construing the 
statute, I have endeavored to observe the fundamental rule 
for the construction of statutes, by considering, first, the 
character of the evil sought to be suppressed, and second, the 
nature of the remedy sought to be applied, and herein the 
structure of the tribunal charged with the execution of the 
statute. First, then, as to the evil. What is meant by the 
phrase, 'or in conducting any other scheme or device for 
obtaining money through the mails by means of false or 
fraudulent pretenses, representations, or promises?' Was it 
intended to include only what is technically a false pretense 
within the meaning of the criminal law ? 

I am clearly of the opinion that Congress did not use the 
term in this limited sense. 

In the first place, in legislating for the Executive Depart- 
ments, Congress is presumed to use words and terms in the 
sense in which they are understood by the public rather than 
in their technical sense. 

In the second place, seemingly for the purpose of re- 
moving any doubt that might arise, the term 'false' is en- 
larged upon and explained by the correlative term 'fraudu- 
lent,' and the term 'pretense' is in like manner enlarged by 
the term 'representations or promises.' 

So that the Postmaster-General is authorized to prohibit 
the use of the money-order or registry system to anyone 
engaged in obtaining money through the mails by means of 
false or fraudulent pretenses, false or fraudulent representa- 
tions, or false or fraudulent promises. 

In the view that I have taken the statute was designed 
to cover every conceivable form of fraud, where it is shown 
that the use of the mails constitutes an essential or important 
factor in the perpetration of such fraud. 

Where it is shown that a party is carrying on a business 
through the mails which by reason of the worthless or trifling 
character of his goods he could not carry on if brought face 



234 Lotteries, Frauds and Obscenity in the Mails. 

to face with his customers, it presents a case to my mind for 
the application of the statute. 

I do not mean to say that in dealing with his customers 
through the mails a party may not puff his goods, in the sense 
in which that term is understood. What I do mean to say 
is that a party soliciting orders through the mails is, in view 
of this statute, (to say nothing of the ordinary obligations of 
honesty), bound to state at his peril practically and substan- 
tially what he proposes to sell. This description, too, must be 
addressed to the understanding of people to whom his solicita- 
tions are sent. Knowing, as the advertiser does, that the 
parties, whose patronage he solicits, are, by reason of their 
remote localities, unable to make personal examination of 
his goods, he is bound in law as well as in morals to send in 
response to their remittances just such goods as by advertise- 
ment he leads them to suppose they will get." 

That is as clear a statement of the meaning of sections" 
3929, 4041 and 5480, as can be made. 

Nine-tenths of the schemes the Postmaster-General finds 
to be fraudulent consist of the mere intention of the promoters 
not to carry out a promise in the future. It is true the Post- 
master-General does not deny the use of the mails to anyone 
simply upon a supposition that he will not fulfill his promise, 
in the future, but it is also true that he has no power to act 
under sections 3929 and 4041 in regard to frauds already per- 
petrated. When he finds a party, having devised a scheme 
to defraud, has defrauded some one, and is still advertising 
the same scheme, he denies the use of the mails to the 
party for the sole purpose of preventing the consummation of 
the fraud in the future. 

This construction is also forfeited by the amendment of 
the act of March 3, 1889. It is not doubted that some thought, 
that, to make out a case under section 5480 as it originally 
stood, the promoter of the scheme must have intended to 
defraud the party with whom he dealt, and that as the vendor 
of counterfeit money informed his correspondent what he was 
to get, he would be guilty of no crime. Hence the amend- 



Lotteries, Frauds and Obscenity in the Mails. 235 

ment. But in fact the amendment added nothing to the sec- 
tion because Judge Benedict, in 1882, in United States" vs. 
Jones (10 Fed. Eep. 469), distinctly held that the selling of 
counterfeit money to a party, who knew what he was getting, 
for the purpose of putting it off as good money, constituted 
an offense under section 5480 as it then stood, notwithstanding 
the absence of evidence showing an intention to defraud any 
particular person. Judge Benedict said: "Any scheme, the 
necessary result of which be to defraud somebody would 
be a scheme to defraud within the meaning of section 5480." 
This ruling and this amendment point unerringly to the intent 
of Congress to prevent the use of the mails in the conduct of 
any scheme, which is devised to defraud generally, and of 
course there may be a conviction by simply showing an intent 
to defraud by a scheme to be effected through the mails and 
by the actual use of the mails in executing it, though no false 
promise has been made to any particular person and no one has 
in fact been deceived and defrauded. The mere offering of 
counterfeit money through the mails is sufficient, and it 
is also sufficient to constitute the crime to make any other 
offer through the mails with the intent to defraud somebody 
who may in the future be deceived by it. 

Sec. 201. But the Supreme Court of the United States 
has fully answered the contention that this Statute covers only 
cases where there has been a misrepresentation of a past or 
existing fact and does not include false promises to do some- 
thing in the future. 

In Durland vs. United States, 161 U. S. 305, Durland 
was convicted of operating a so-called Bond Investment 
scheme through the mails as a scheme to defraud. The court 
said : "But the contention on his,, (defendant's) part is that the 
Statute reaches only such cases as, at common law, would come 
within the definitions of 'false pretenses/ in order to make 
out which there must be a misrepresentation as to some existing 
fact and not a mere promise as to the future. It is argued 
that there was no misrepresentation as to the existence or 
solvency of the corporation, the Provident Bond and Invest- 



236 Lotteries, Frauds and Obscenity in the Mails. 

ment Company, or as to its mode of doing business, no sug- 
gestion that it failed to issue its bonds to any or every one 
advancing the required dues or that its promise .of payment ac- 
cording to the conditions named in the bond was not a valid 
and binding promise. And then as counsel say in their brief, 
'it (the indictment) discloses, on its face, absolutely nothing 
but an intention to violate a contract. If there be one principle 
of criminal law that is absolutely settled by an overwhelming 
avalanche of authority, it is that fraud, either in the civil 
courts or in the criminal courts, must be the misrepresentation 
of an existing or a past fact and can not consist of the mere 
intention not to carry out a contract in the future.' The 
question thus presented is one of vital importance and under- 
lies both cases. We can not agree with the counsel. The 
Statute is broader than is claimed. Its letter shows this: 
'Any scheme or artifice to defraud.' Some schemes may be 
promoted through mere representations and promises as to the 
future, yet are none the less schemes or artifices to defraud. 
* * ' * But beyond the letter of the Statute is the evil 
sought to be remedied which is always significant in determin- 
ing the meaning. It is common knowledge that nothing is 
more alluring than the expectation of securing large returns 
on small investments. Eagerness to take the chances of large 
gains lies at the foundation of all lottery schemes and even 
when the matter of chance is eliminated any scheme or plan, 
which holds out the prospect of receiving more than is parted 
with, appeals to the cupidity of all. In the light of this the 
Statute must be read, and so read it includes everything de- 
signed to defraud by representations as to the past or present 
or suggestions and promises as to the future. The significant 
fact is the intent and purpose. The question presented by 
this indictment to the jury was not as counsel insist whether 
the business scheme suggested in this bond was practical or 
not. If the testimony had shown that this Provident Com- 
pany and the defendant, as its president, had entered in good 
faith upon that business, believing that out of the money re- 
ceived they could, by investment or otherwise, make enough 



Lotteries, Frauds and Obscenity in the Mails. 237 

to justify the promised returns, no conviction could be sus- 
tained, no matter how visionary might seem the scheme. The 
charge is that in putting forth this scheme it was not the intent 
of defendant to make an honest effort for its success, but that 
he resorted to this form and pretense of a bond without a 
thought that he or the company would ever make good its 
promises. It was with the purpose of protecting the public 
against all such intentional efforts to despoil and prevent the 
postoffice from being used to carry them into effect that this 
Statute was passed; and it would strip it of its value to confine 
it to such cases as disclosed an actual misrepresentation as 
to some existing fact, and exclude those in which is only the 
allurement of a specious and glittering promise. This, which 
is the principle contention of counsel, must be overruled." 

Sec. 202. The history of the administration of the law 
in the Postoffice Department shows that two classes of frauds 
are common. First, where the promoters do not intend to do 
anything toward the execution of their promises, such as a 
promise to send some article of value or to appoint agents at 
good salaries upon receipt of specified sums of money. Second, 
where the promoters so adroitly contrive their schemes as to 
make the public believe one thing will be done when the 
promoter intends to do another. One party, for instance, 
advertised that he would give employment to parties for "writ- 
ing at home." When the victims sent their money they learned 
that the "writing at home" meant simply the writing of the 
letters they had already sent to the swindlers. Another used 
language calculated to make the public believe an article 
would be given free upon sending a small sum to pay for a 
periodical (devoted wholly to advertising fake concerns). 
This notice wound up by saying, "Send us the money and we 
will send you the paper and our offer." The money would be 
sent and the writer would receive the worthless paper and a 
printed slip headed, "Our offer," in which it was explained 
that upon receipt of the money for a club of subscribers, rang- 
ing from 5 to 50, the free article would be sent. Another 
party advertised a chinch-bug destroyer for $5. When the 



238 Lotteries, Frauds and Ohscenity in the Mails. 

victim received the "destroyer" he found it to consist of two 
small paddles, and he was directed to catch the chinch bug, 
put it on one paddle, strike it with the other, and death would 
be instantaneous. 

An enterprising man offered to send a fine steel engrav- 
ing of Gen. Washington to anyone remitting to him a small 
sum of money. When he received the money he sent a postage 
stamp with Washington's engraving on it. 

There are probably thousands of frauds of this character 
constantly advertised in our country by which the people are 
fleeced. The promoters of these schemes usually demand 
very small sums, so that the victims rather than be put to the 
trouble and expense of seeking redress in the courts ordinarily 
submit; and such schemes as these are the ones Congress in- 
tended to suppress, so far as the mails are concerned. 

SCHEMES INVOLVING THE EXERCISE OF SUPERNATURAL POWER. 

Sec. 203. As is well known there are many fakirs in the 
world who dupe people by taking advantage of popular su- 
perstitions or inducing a belief in their supernatural power. 
There is the fortune teller claiming to be the seventh daughter 
of a seventh daughter born with a veil over her face and be- 
cause of such things to be endowed with power to look into the 
future and reveal its secrets. 

Then there is the healer, who claims to possess the power 
to cure disease by a look or touch or through the means of 
some tangible object, which he has blessed and to which he 
has imported a healing potency. And again we find that the 
water witch or mineral witch, who claims to be able by super- 
natural or magnetic power to discover hidden streams of water 
or treasure. Some of these utilize this supposed power to 
make money, while others take what the public give them, 
claiming nothing as a right. It is a very delicate question 
how far the Government has the right to go in suppressing 
the business of these people through the mails. 

Sec. 204. A party claiming to be a physician advertised 
that he had learned a secret through the spirit of Rameses, I, 



Lotteries, Frauds and Obscenity in the Mails. 2'69 

by which he could cure certain diseases. In pursuance of the 
information, thus obtained, he prepared a disc about an inch 
and a quarter in diameter, which he sold for a dollar. He 
caiitioned the purchasers not open it as it would thereby lose 
its efficacy, which had been imported to it by much medita- 
tion and loss of power on his part and he directed that the 
parties, using it, should place it over the heart, concentrate 
the mind on it and repeat slowly and solemnly the word 
"Tetragrainmaton." Complaints were made to the Postoffice 
Department that this scheme was a fraud and its promoter was 
denied the use of the mails. The officials of the Postoffice 
Department dissected the disc and it was found to be made of 
a circular piece of paste board, with tin foil on each side and 
covered with chamois skin, the whole cost of material and 
work being about five cents. 

Sec. 205. Another case of this class is IT. S. vs. Fay, 
83 Fed. Rep. 839. Pay pretended that he had some myste- 
rious, superhuman power,, among other things, to penetrate, 
with mental reason into the bowels of the earth and discover 
the location there of supposed hidden treasures. He wrote to 
one Howard, advising him of his possession of these powers, 
which he represented to be higher than mortal and assuring 
him for $50, he would positively find certain treasures sup- 
posed to be hidden away somewhere on Howard's farm. The 
money was paid, the treasures were not found and Pay was 
indicted in the IT, S. District Court at St. Louis. That court 
held that was not a scheme to defraud under section 5480 
R. S., IT. S., on the ground that the scheme was visionary, 
irrational and stupid, and as not being calculated to deceive 
a rational being possessed of ordinary sagacity. The judge 
said: "There is a marked distinction between a case of this 
kind involving, as it does, a physical impossibility and one 
related to religious, moral or ethical tenets. A scheme to de- 
fraud, planting itself upon, and seeking to take advantage of 
such tenets entertained as they are by a large number of peo- 
ple, has been held to be within the contemplation of the 



240 Lotteries, Frauds and Obscenity in the Mails. 

federal statutes and with, this class of cases I have no fault to 
find." 

Sec. 20(3. This ruling is in conflict with .the spirit of the 
law as interpreted by other courts, by the Postoffice Depart- 
ment and by the Supreme Court of the United States. With 
all due deference to the opinion of the learned judge in this 
case it may be assumed as unquestionably the intent of Con- 
gress in this legislation to protect the unwary and simple from 
the fraudulent machinations of the crafty and unprincipled. 
As was stated by the promoter of a fraudulent scheme a few 
years ago to the postal authorities at Washington, it is not the 
wise, shrewd business men and women, whom these schemers 
hope or expect to fleece, but the unwary and foolish. 

If the test made by the court in this case be applied to the 
facts in the Durland case the conclusion of the Supreme Court 
would have been the reverse of what it was. In that case 
Durland set forth his plan of operations with great precision 
and particularity and anyone, with ordinary business capac- 
ity, could have soon discovered, by investigation, that in- 
evitable loss must come to a very large number of the investors 
in the scheme and yet the court held the scheme came within 
section 5480, because the jury had found Durland divised it 
to defraud and used the mails in conducting it. The court in 
the Fay case says that while the freedom of religious opinion 
and thought should be scrupulously maintained, yet a scheme to 
defraud, planting itself upon and taking advantage of religious 
tenets, should be held to come within the contemplation of the 
Federal Statute. Why? There are hundreds of millions of 
people in the world to-day who have opinions relative to the 
supernatural, that other hundreds of millions of people regard 
as visionary, irrational and stupid. If taking advantage of 
these opinions to" perpetrate a fraud brings the scheme within 
the Statute, why should not taking advantage of the opinion, 
entertained by a large number of people and intelligent peo- 
ple too, that there are men who possess the suj trnatural power 
of locating water or treasure hidden beneath the earth's sur- 
face ? These men are known among the people as water or 



Lotteries, Frauds and Obscenity in the Mails. 241 

treasure witches. To the ordinary mind such a power seems 
visionary and even stupid but to the person who has faith in it, 
it is a reality — a verity. 

]STot long since an old negro was swindled out of $4,000, 
money he had earned by hard labor and a life of frugality, 
because he had implicit faith in this power. A schemer told 
him that some Indian traders, at the beginning of the present 
century, had buried $250,000 in silver on his land and that it 
could be found by putting some dirt, taken from the grave of 
one of the traders, into a vessel and carrying the vessel over 
the land; that when the party carrying the vessel came to the 
spot where the treasure was hid, the dirt in the vessel would 
move. The negro, who was regarded as a good business man, 
though without education, put up $4,000 against the advice of 
a banker in the neighborhood to carry out this scheme, which 
involved an impossibility as it presented itself to the ordinary 
man. The negro related the facts of the case, after he dis- 
covered that his money was lost, to his attorney and when asked 
if he believed the story told by the swindler he replied that he 
did. Should that negro not be protected simply because he 
had faith in an impossibility? Was he insane on this point? 
If so he was clearly entitled to the protection of the law. 
Whether sane or insane the taking of his hard earned money 
by an appeal to his superstition or whatever it may be called 
was a hideous crime that deserved not only the severest punish- 
ment but the execration of mankind. 

In the Fay case Howard no doubt believed what Fay told 
him as simplicity as the negro believed the nameless swindler. 
To the judge of the United States Court for the Eastern 
District for Missouri Fay's claimed power appeared visionary, 
irrational and stupid but Howard probably thought it was a 
veritable reality. Indeed it must have been a reality to him 
or he would not have put up any money to test it. 

In determining whether a scheme comes within this Stat- 
ute or not the question is not what the intended dupe ought 
to believe but what he does in fact believe. The question is 

16 



242 Lotteries, Frauds and Obscenity in the Mails. 

simply whether the party has devised a scheme or artifice to 
defraud and has used the mails to carry it cut. Nor does it 
make any difference that the scheme presented may appear 
visionary or impossible to many or a large majority of people. 
As stated by the judge himself in the Fay case when a scheme 
is carried out by the swindler by taking advantage of a relig- 
ious opinion entertained by his entended dupe, it should be 
held to come within the Federal Statute. And this is the effect 
of the decision in United States vs. Reed, 42 Fed. Rep. 134. 

Sec. 207. There the defendant, advertised that, by an 
unknown power, he was able to answer sealed letters addressed 
to spirit friends. He directed his would-be-customers to write 
the full name or names of their spirit friends on slips of paper 
— to address them by terms of relationship or friendship — to 
ask questions which it was desired should be answered, to sign 
their own full names and place the slips in envelopes and seal 
them and then place these in larger envelopes directed to the. 
party advertising the scheme. He claimed he could obtain ans- 
wers to the questions without opening the inner letters. His 
charge for each answer was one dollar, which he proposed to 
return if no answer could be obtained which he admitted was 
sometimes the case. 

Numerous statements of the promoter of the scheme were 
shown tending to prove that sometime previous to his trial he 
acquired a knowledge of the trick of opening sealed letters 
by an exchange of tricks with another party. He offered to 
show that in particular instances he had satisfactorily answered 
sealed letters and that the questions answered were of such a 
character that he could not have answered them except by 
supernatural power. . This testimony was excluded. He also 
asked the privilege of giving an exhibition or test of his power 
in open court This was also denied. Judge Severens, charg- 
ing the jury, said: "The defendant, in this case, founds his 
defense upon the claim, as urged by his counsel, that this was 
not a scheme to defraud. The question of fact is upon the 
first head what was the intention or more precisely what was 
the belief of the defendant as to his capacity or power to get 



Lotteries, Frauds and Obscenity in the Mails. 243 

answers to questions contained in sealed letters from the spirits 
of the departed ? 'Now, gentlemen, every man has an absolute 
right to believe what he will. It is a phase of religious pri- 
vilege which is guaranteed by the fundamental law of the land 
to every citizen. This right of belief and the right of associa- 
tion for its promulgation is complete and the party, holding 
any belief may engage in any practice founded upon it unless 
he, thereby, injures the peace and welfare of the public. A 
man may not carry his belief into conduct which is injurious 
to the public and contrary to law. This is a distinction of 
great importance in view of the guaranty of religious freedom 
and of opinion in all matters of belief which is guaranteed by 
the constitutions of the several states and in large measure by 
the Constitution of the United States. It is the difference 
between belief and action, of opinion and conduct in practical 
matters. If a man carries his belief into a practice or a busi- 
ness involving a fraud and known to him to be such, he is lia- 
ble to be dealt with by the law; and if he also uses the mails to 
promote such business he is liable to indictment and punish- 
ment in the Courts of the United States. The interests of 
society require that every man's conduct should conform to 
the law; and while it protects him in his freedom of opinion 
and belief in all religious and spiritual matters, it will not 
permit him, under the guise of that belief, to do a thing which 
the laws of the country condemn. To permit this (to employ 
the language of the Supreme Court of the United States in 
dealing with an analogous question) would be to make the 
professed doctrines of religious belief superior to the laws of 
the land, and, in effect, to permit every citizen to become a 
law unto himself. There could be no improvement under 
such circumstances and it could not be tolerated. Upon the 
question of an intent to devise a scheme to defraud the rule 
is this : If the scheme be adapted in its plan to work a fraud 
upon others and the defendant knew that a material represen- 
tation therein contained and calculated to deceive was not true 
or if he did not believe it was true, then the intent is made 
out. So that the material question here is, did the defendant 



244 Lotteries, Frauds and Obscenity in the Mails. 

devise his scheme of business in good faith ? Did he believe 
that he could obtain answers to sealed letters from the spirits 
of the departed relatives and friends of the inquirers? * * :f 
You must not abandon the search of truth upon the suggestion 
that the elements of inquiry are not open to your pursuit, if 
your reason seems to you sufficient to see the facts. In other 
words, you are not to disregard or fail to give effect to your 
own convictions upon the! testimony about the facts by reason 
of a cloud of mysteries which you can not penetrate. For 
the purpose of administering the law you must adhere to what 
is practical and solve all questions by the best practical means 
at hand. Xo man has a right to embark in a business and 
insist that the legality of it shall be tested by principles beyond 
the understanding of others and not by the apprehension of the 
courts and juries of the country, if when tried and tested by 
common human understanding the purpose is found mischiev- 
ous and unlawful. In order to convict this respondent you 
must find from the evidence, beyond a reasonable doubt, that 
he did not believe that he could do what he pretended he 
could do. * * * If he acted in good faith then there was 
nothing criminal in what he did; because the law looks, in 
determining this question of fraud, to the intent with which the 
act, charged to have been done, was done. * * * If this 
was a scheme gotten up by him without any belief on his part 
that he could get answers to sealed letters from the spirits of 
the dead and, if without regard to the question of his ability 
to do this, he divised this scheme for the purpose of imposing 
upon and gulling the public and getting money through 
that means, it was a fraud and should be denounced as such. 
If, on the other hand, he honestly believed he could do this 
which he advertised he could do then there is no fraud." 

The jury, having found the defendant guilty, a motion 
for new trial was subsequently argued before the District 
Judge, the Circuit Judge also sitting, and, after full argument, 
was overruled. 

The court here not only recognizes the fact that there is a 
popular belief in supernatural power but also holds an accused 



Lotteries, Frauds and Obscenity in the Mails. 245 

party guiltless, if lie honestly believes he possesses such power. 
The power to obtain answers to letters under seal, without 
opening them, seems as visionary, irrational, stupid and even 
impossible as the power to discover hidden wealth. But Fay 
was discharged not because he honestly believed he possessed 
supernatural power but because his dupe ought to have known 
that he did not possess it. 

The Postofnee Department, following the principle laid 
down in the Eeid case, has denied the use of the mails to 
fortune tellers and others operating similar schemes . 

BUCKET SHOPS. 

Sec. 208. Operators, holding themselves out ostensibly 
to the public as commission merchants, but in fact conducting 
what is known as a "Bucket Shop" business have been held 
by the Postofnee Department to come within the embrace of 
section 5480. So also have those who conduct a pooling or 
syndicate scheme in the speculative market. The fraud in 
this class of cases consists in the fact that the operators can 
convert to their own use all the money they receive for invest- 
ment without making any record showing what disposition 
they make of the funds, whereas the investors suppose such a 
record is kept from the announcement that the operators are 
doing business as commission merchants. Many of these 
operators appear before the Postofnee Department in defense 
of their schemes and they uniformly admit that a "Bucket 
Shop" or Pool or Syndicate Sale is fraudulent per se. 

As one of the thousand examples the following may be 
cited from a report made by a special agent or inspector of 
mails. Advertisements were made and circulars sent out in a 
firm name that assumed to conduct i(5 business upon legiti- 
mate principles, not depending upon chance but upon accumu- 
lated capital, invested under the advice and superintendence 
of men of experience, judgment, and integrity in the actual 
purchase of stocks in Wall Street, holding the stocks until a 
considerable advance was secured, when thev were closed out 



246 Lotteries, Frauds and Obscenity in the Mails. 

and profits, less a moderate commission paid to the agents who 
effected the purchase and sale, were divided among the persons 
advancing the money. This pamphlet, advertisement and cir- 
cular often bringing a remittance, and using part of this 
amount as a bait, they returned to the sender with a circular, 
of which the following is a specimen: 

"Dear Sir: We take pleasure in informing you that we 
made a turn in Northwestern preferred stock, selling short at 
65 7-8, and covering at 65, realizing a profit of 7-8 per cent, 
being equivalent to $87.50 profit on each 100 shares of stock. 

!N". B. The profits and original capital to be used as 
working capital until the close." 

That this bait generally drew more money from the un- 
suspecting and innocent speculators is evidenced from the 
number of the letters received at the Postofflce Department, 
procured from the swindlers by its special agent. 

Following this kind of circular came one not so encourag- 
ing, as follows: 

"Dear Sir : We regret to have to inform you that, owing 
to the terrible fluctuations in the stock market during the week 
and the great demands upon us for money, together with an 
unusual stringency of the money market, we have been forced 
to close out all the stock we have been carrying with our own 
capital, and have had to do so at a great loss to ourselves. 
Feeling that we have done all that we could, even to inflicting 
additional losses upon ourselves, we can only hope to retrieve 
our losses, as well as to help you to recover your losses, by 
new ventures, where, with a brighter outlook in the stock 
market and renewed efforts, our losses may soon be forgotten 
in the large gains." 

Or perhaps something like the following : 

"Dear Sir: "We regret to inform you that we made a 
very unlucky turn with the combination in which you were 
interested, buying St. Paul common at 30 3-4, when the stock 
declined very rapidly, with the entire capital of one per cent, 
margin, and other profits that we have already accumulated 
were entirely exhausted. We regret exceedingly that this 



Lotteries, Frauds and Obscenity in the Mails. 247 

venture was unsuccessful. However, if you take another 
venture we will do all in our power to make it a success, and 
retrive these losses." 

By this time however, the recipient of the circular saw 
only too clearly the swindle which was being perpetrated, and, 
gaining experience from his depleted pocketbook, doubtless 
resolved to speculate no more in stock. 

It is hardly necessary to state that none of these pretended 
firms ever spent one dollar in stock buying, or even pretended, 
beyond the wording of their circulars, to make the transaction 
alluded to. From the first to last the affair was a swindle. 

Sec. 209. A "Bucket Shop" scheme come before the 
court in U. S. vs. Loring, 91 Fed. Eep. 881. 

Fleming and Loring were indicted in the District Court 
of the United States for the Northern District of Illinois, 
charging that they, pretending to be commission merchants at 
Chicago and the managers of an association and a fund under 
the designation of Fleming and Meriam's a Fund W," for 
speculating in grain, provisions and stock, had devised a 
scheme and artifice to induce divers other persons to send 
them money for investment in said fund, but they intended in 
fact to convert the money so received to their own use and 
thus to defraud the persons who should send them money and 
that they intended to conduct and they did conduct this 
scheme through the mails. Judge Blodgett, before whom the 
case was tried, in his charge to the jury, among other things, 
said: "The object of this Statute was to prevent the use of 
the Postoifice Establishment for fraudulent purposes. The 
postal system may well be considered as one of the most useful 
devices of our modern civilization, organized and supported 
at public expense. It furnishes so cheap, expeditious and 
certain a method of communication between persons in differ- 
ent parts of the country and by means of postal treaties in 
foreign countries, that the temptation to use it for the promo- 
tion of fraudulent schemes is very great. And hence, Con- 
gress has deemed it wise to enact the Statute I have just read 
in order, if possible, to prevent what is intended to be and is 



248 Lotteries, Frauds and Obscenity in the Mails. 

one of the beneficient agencies of the age from being converted 
by bad men into an instrumentality for the perpetration of 
crime. * * *■ It is not necessary in order to make out a 
case under the law that the defendant shall be the inventor or 
originator of the scheme. * * * If a man adopts some 
old scheme which another devised, and acts upon it, he has 
made it his own for the purposes of the act. * * * The 
gist of the fraud charged * * * is the purpose of the 
defendants to convert to their own use the moneys which they 
should induce and procure other persons to send them to be 
used as a part of the alleged 'Fund W ? in speculating in 
grain, provisions and stocks. * * * If the proof satisfies 
you that this 'Fund W has been lost in dealing in good faith 
in grain, provisions and stocks then the allegations as to the 
fraudulent character of this 'Fund W scheme are not sus- 
tained. * " x " * The question is, did they deal in grain, stocks 
and provisions in good faith for the benefit of the shareholders 
and has the money in question been lost in that way. This you 
must decide by the evidence in the case and that this is the 
turning point or pivotal point in this case, you must already 
have seen. There is proof in this case as to the methods of 
dealing on those exchanges where it is claimed that most, if 
not all, this money was lost. You will see from what the 
proof discloses in regard to the methods of these concerns 
that there is to say the least ample opportunity in their 
methods for making up a fictitious or fraudulent account, 
if it is desirable for the purposes of the exchange or any of its 
customers to show a loss. No regular books of transactions 
are kept, but the transactions are kept on sheets as they are 
called. But, aside from this, you can see that by those me- 
thods the managers of the affair, Fleming and Mariam, if 
they wished an apparent transaction, could readily put them- 
selves on the wrong side of the market at any moment and 
purposely sink or apparently sink a very large sum in margins 
at any time. It is also true that the defendants, as managers 
of these funds, could only realize for themselves the benefits 
of these losses by some collusive arrangement with the man- 



Lotteries, Frauds and Obscenity in the Mails. 249 

agers of the exchange. And yon are to say from the proof, 
from the relations which the testimony discloses between these 
parties, the intimacy which existed between all or some of 
them, whether there was or was not snch relation between 
them as renders it not only probable but certain, beyond rea- 
sonable doubt, that this money was lost by arrangement be- 
tween the managers of the fund, the defendants, and the man- 
agers of those exchanges (the Public Produce, Grain and 
Stock Exchange and the Metropolitan Grain and Stock Ex- 
change of Chicago). But, if the proof satisfies you that the 
money was so apparently lost for the mere purpose of making 
up a record or show of losses and went into the hands of the 
proprietors of these exchanges in order that the managers of 
the fund could realize some direct or indirect benefit from it, 
then you will be justified in finding the allegation of fraud 
in the indictment sustained." The defendants were con- 
victed. 

FRAUDS ; THE C. O. D. BUSINESS. 

Sec. 210. A scheme, known as the "0. O. D. business," 
has been extensively adopted in late years for the sale of 
medicine for weak men. The promoters advertise in a ficti- 
tious name or the name of some person, interested in the 
scheme, to the effect that such fictitious person or other person 
has been cured of a private disease by using a certain medicine, 
prepared and for sale by the promoter and will send a free 
prescription to anyone, afflicted with such disease, who will 
write for it. The dupe writes to the party, whose name is 
signed tcthe advertisement, supposing he is addressing a real, 
disinterested person. The letter written, however, is not seen 
by the addressee but goes directly into the hands of the 
promoter. The promoter has the prescription prepared in 
lithographic form and stamps across its face the words "for I 
weak men" so as to deter the recipients from having it filled 
at the local drug stores. This prescription is sent, accompanied 
by a letter stating that the promoter, feeling confident his med- 
icine is a sure cure for the disease,has taken the liberty to send 



250 Lotteries, Frauds and Obscenity in the Mails. 

C. O. D. a package of the medicine, at a cost of $3.00. If the 
dupe refuses to take the package out of the express office he 
is notified by the promoter that he can have the medicine by 
paying one dollar and if he still refuses the express agent is 
directed to destroy the package, thus proving conclusively that 
the stuff is not worth the cost of returning it. 

This method of doing business is not resorted to to sell any 
article except medicine for the cure of private deseases. The 
reason for this is apparent. It would not work in the sale of 
anything else and the promoters bank on the fact that the moss 
of men, afflicted with private diseases, will take the packages 
out of the express office and pay for then rather than make 
any objection for fear it would lead to an inquiry into their 
condition. This scheme has been worked of late years so suc- 
cessfully that many, engaging in it, have made large fortunes 
and it has become so disreputable to advertise it that parties 
advertising other patent medicine remedies take the pains to 
state that they are not engaged in any "C. 0. D. swindle." 

The Postoffice Department denied the use of the mails in 
the conduct of this scheme. 

FKAUDS ; COLLECTION AGENCIES. 

Sec. 211. Certain agencies a few years ago adopted the 
following method to collect claims alleged to be due news- 
paper publishers: On their letter-heads they would print, 
what became known as "Newspaper Laws," the substance of 
which was that a subscriber could not stop the paper until he 
paid all arrearages;- that a refusal to take the paper out of the 
office or leaving it uncalled for was prima facie evidence of 
intentional fraud; that the postal laws were such that a pub- 
lisher could arrest anyone for fraud, who took a paper out of 
the office and refused to pay for it; and under the same laws 
the man who allowed "his subscription to run along for some 
time, unpaid, and then ordered it discontinued or ordered the 
postmaster to mark it refused, and had a postal card sent so noti- 
fying the publisher, was guilty of obtaining money under false 



Lotteries, Frauds and Obscenity in the Mails. 251 

pretenses, laying himself liable to arrest and fine, the same as 
for theft." No such laws as these existed and complaints were 
made to the Postoffice Department that the agencies attempted 
in many cases to coerce the payment of unjust claims by 
threatening to enforce the laws they thus printed on their 
letter-heads. These agencies insisted that every man was pre- 
sumed to know the law and that a false pretense as to what the 
law is does not come within the terms of section 5480. But 
they were not able to make a satisfactory reply when asked 
what their object was in printing such so-called laws so con- 
spicuously in their correspondence if no one was in fact misled 
and deceived by them. The truth is thousands did believe that 
the laws, thus promulgated, did exist and many unjust claims 
were paid because the alleged debtors feared to come within 
reach of Uncle Sam's strong arm. It is a well known fact that 
most people have a mortal dread of getting into the Federal 
Courts. 

The Department denied the use of the mails to these 
agencies, holding that an attempt to collect an unjust claim by 
a threat to enforce a penal law they knew had 110 existence 
came within the contemplation of the Statute. 

It may be remarked, en passant, that the newspaper 
business is sui generis. If all publishers would send their 
papers to subscribers only and then would promptly discon- 
tinue them, when the time of subscription is out but little 
difficulty would intervene. But, as is well known, many pub- 
lishers send their papers to persons who have not subscribed for 
them and in that case the recipients suppose the papers are sent 
as a compliment to them and hence take them out of the post- 
office and read them and in other cases the publishers, having 
obtained subscriptions for a limited time, continue sending 
their papers for years after the expiration of the subscription 
time and recipients are expected by the publishers to pay and 
often do pay large bills for papers they do not want. So pe- 
culiar is the contract between the publishers and subscribers 
of a newspaper that collection agencies have made no attempt 
to coerce payment of any bill except one for a newspaper by 



252 Lotteries, Frauds and Obscenity in the Mails. 

the publication of a penal law and the threat to enforce a law 
that has no existence. 

EKAUDS : MISCELLANEOUS CASES. 

Sec. 212. A promoter advertised that he would give a 
prize of twenty dollars to the party who would correctly fill 
up four skeleton words given in an advertisement of the 
scheme which was called "The flag signal guessing contest." 
The promoter informed the public that on receipt of the an- 
swers he would send to the competitors one of his circular ad- 
vertisements on which were stamped flags of four different 
colors ; one color representing that one word had been correctly 
filled; one color representing that two words had been cor- 
rectly filled and so on, the fourth representing that all four 
words were correct. Upon receipt of their "flag signals/' as 
they were called, the competitors were required to send the 
promoter a certain amount of money, before their names 
could be considered in the awarding of the prize. The contest 
was so simple that all competitors made four correct words and 
received the "flag signal," indicating that they had filled all 
the words correctly. Complaint was made to the Postoffice 
Department that this scheme was a fraud and the promoter was 
asked to explain his methods which he readily did. He in- 
formed the Department that there were thirty-six words that 
could be made, using the skeleton words given as a basis and 
upon a careful reading of the advertisement it was found that 
it was so adroitly constructed that it might be construed to 
mean that the prize should go to the person only who made 
all the possible words out of the skeleton words, though to the 
ordinary reader it meant simply that the party giving four 
correct words would get the prize. That that was the appar- 
ent meaning of the advertisement clearly appeared when the 
promoter informed the Department that only one out of 
thousands of competitors had construed it the other way. The 
scheme was held a fraud under section 5480, Revised Statutes, 
because it was devised to deceive and did deceive and mislead 
the public. A widow woman was so sure she would get the 



Lotteries, Frauds and Obscenity in the Mails. 253 

prize when she received tlie "nag signal/' representing she had 
made four correct words that she went to a store in the town 
where she resided and bought goods to the amount of twenty 
dollars on the faith of it and another had promised to pay the 
interest on a mortgage on her house when she received this 
prize money. 

Sec. 213. U. S. vs. Wooten, 27 Fed. Rep. 702, is a case 
where the parties were charged with a conspiracy to obtain 
goods without any intention of paying for them. 

Sec. 214. The sending through the mail of a letter cal- 
culated to induce the purchase of counterfeit money at a low 
price for the purpose of circulating it constitutes an offense 
Under section 5480, Revised Statutes, although there is no 
evidence of an intention to defraud any particular person. 

IT. S. vs. Jones, 10 Fed. Eep. 469. Judge Benedict said, 
in that case, that "any scheme, the necessary result of which 
was to defraud somebody, is a scheme to defraud within the 
meaning of section 5480." 

Sec. 215. A case came before the Postoffice Depart- 
ment in 1897 which is instructive. 

A party used a firm's name and the name of a publishing 
company in doing business in procuring and selling patents. 
He was charged with a violation of section 5480 and after an 
exhaustive hearing the Assistant Attorney-General for the 
Postoffice Department (Gen. Tyner) found the facts to be 
that the accused used the mails in transmitting to the public 
his advertisements and alluring circulars and letters inviting 
inventors to submit inventions to him for preliminary searches 
and reports as to their patentability; that he made evasive and 
false reports thereon; that their correspondents, relying upon 
said false and deceptive reports, and trusting in their compe- 
tency, honor and honesty, were induced to remit money to him 
to pay the necessary expenses of drawings for their devices, 
the preparation of applications for patents thereon, the first 
office fees and the attorney fees required by the accused; that 
even when the application was rejected and the patent thereon 
refused, he withheld the fact from the applicant, or communi- 



254 Lotteries, Frauds and Obscenity in the Mails. 

cated it to him in such a misleading way as to conceal from him 
the indisputable fact, that all of value in his invention had been 
anticipated, coupled with the offer to proceed, upon the remit- 
tance of a sum required by him to pay the additional cost and 
fees, with an appeal from the rejection by the examiner to the 
board of examiners in chief, well knowing that no appeal could 
be sustained, and failing to even appear before said board and 
present the reasons for the appeal ; then he followed up the de- 
ceit and fraudulent representations by suggesting that a valu- 
able foreign patent could be secured on his patent, knowing 
the representation to be false and fraudulent. Furthermore, 
by seductive and alluring assurances that his invention, after 
being patented (although the patent might cover claims so 
narrow or be based on devices so useless as to be worthless), 
would be worth a large sum of money as an article of sale, gen- 
erally, if not invariably, naming an estimate of from $2,000 
to $20,000 and by offering, upon the payment of $20 in ad- 
vance and the promise of commissions to be realized from a 
subsequent sale, to advertise the invention extensively in the 
metropolitan newspapers to dispose of the patent, presumably 
at the figures of their estimate, he secured large sums of 
money. 

Tempting promises to the inventor of being placed, under 
certain conditions involving the payment of money, on "The 
Eoll of Honor/ 7 prizes of $150 each for the best "idea" 
concerning new inventions, and of being presented with a 
handsome ( ?) prize medal (containing from 20 to 25 cents' 
worth of silver), were mingled with and interspersed through 
his circulars and letters; the whole specious scheme being 
crowned with the offer to "write up" the fortunate inventor 
and to reproduce his photograph conspicuously in the columns 
of the paper he published. 

In the distribution of the prizes he offered for the best 
idea in regard to inventions he selected, as judges, senators and 
representatives in Congress and other public men of promi- 
nence and influence and the awards with the names of the 



Lotteries, Frauds and Obscenity in the Mails. 255 

judges were published all over the country by which he ac- 
quired an enormous and enviable prestige as patent solicitor. 

In giving an opinion to the Postmaster-General in this 
case the Assistant Attorney-General for the Postoffice De- 
partment said: 

"To induce a person, by expressions of opinion, to believe 
and upon such belief to expend money, that he has a device 
which, if patented, will be very profitable to him, which ex- 
pressions any patent attorney of reasonable ability would know 
are not correct and never can be; by stating that a device is 
certainly of a patentable nature which, while technically true, 
is intended to convey the impression that a patent can be ob- 
tained therefor; by asserting that every device submitted is a 
very ingenious and valuable one, which reckless assertion is a 
mere matter of form; by placing ridiculous values on devices 
presented; by reporting so-called unfavorable searches in an 
intentionally evasive and indirect manner, and awarding 
medals for special merit for every device reported favorably, 
certainly amounts, if anything does, to obtaining money by 
means of false and fraudulent representations, pretenses, and 
promises. " 

Sec. 216. In U. S. vs. Mitchell et al., 36 Fed. Kep. 492, 
it appeared that Mitchell, being the holder of a certificate of 
membership in an insurance company, received an assessment 
notice, in writing, requiring him to pay to the company three 
dollars on or before April 19, 1889, in default of which pay- 
ment his right to future indemnity would be lost. He failed 
to comply with this notice and subsequently set up a claim for 
indemnity for an alleged accident occurring shortly after 
April 19, 1887, and in furtherance of this claim inclosed the 
aforesaid assessment notice with $3 in an envelope addressed to 
the company. This letter was mailed April 27, 1887, but in 
order to deceive the officers of the company, the defendants 
changed the date of mailing from April 27 to April 15, one 
of the defendants being an employee of the postoffice where 
the letter was mailed . 



256 Lotteries, Frauds and Obscenity in the Mails. 

Judge Acheson held that these facts did not bring the 
case within the provisions of section 5480. He seems to have 
rested his decision on the ground that the use. of the mails was 
not a part of the original scheme to defraud. He said: "A 
careful study of the language employed has convinced me that 
it was not intended that this section should embrace every case 
where a letter promoted or connected with a fraudulent design 
may be sent through the postoffice by the person engaged in 
or contemplating the fraud. As was said in Brand vs. U. S., 
4 Fed. Eep. 395, the scheme to defraud within the meaning 
of said section is one which is to be affected by the deviser 
of it opening a correspondence by mail or by inciting 
some one else to open such correspondence with him. To con- 
stitute the statutory offense something more is necessary 
than the mere sending through the mail of a letter forming 
part or designed to aid in the perpetration of a fraud. * * * 
It will be perceived that the statutory offense is complete when 
the letter is placed in the postoffice. But in the case in hand 
the fraudulent act was committed after the letter had been 
placed in the postoffice and consisted in the misuse of the mail- 
ing stamp whereby a false date was given to the post mark." 

The learned judge here seems to have overlooked the fact 
that the design to change the post mark of the letter might 
have been formed and probably was formed at the time and 
before depositing the letter in the postoffice ; and in that case 
he would have been guilty under section 5480 which makes 
it crime to devise a scheme to defraud coupled with an inten- 
tion to use and afterwards using the mails in consummating it. 

Sec. 217. In U. S. vs. Owens, 17 Ted. Eep. 72, Judge 
Treat held that an attempt to defraud a creditor by inclosing 
with a letter to him worthless slips of paper in place of money 
stated by such letter to be inclosed therewith and sending such 
letter and inclosed slips to the creditor through the mail is not 
an indictable offense under section 5480. The judge said: 
"It is obvious that the fraudulent scheme could not be effect- 
ive. The debt would not be discharged by the receipt of 
worthless slips of paper nor even by the giving of a receipt ob- 



Lotteries, Frauds and Obscenity in the Mails. 257 

tamed by fraud. . * * * Xo one was defrauded and no 
one could possibly be. " * * Were the postal 
laws designed to draw within Federal jurisdiction each 
and every individual transaction between debtor and 
creditor, irrespective of the possibilities of effecting a fraud 
if any were intended? *.*..■* If such is the scope of the 
section named, it may draw within Federal cognizance nearly 
all the commercial correspondence of the country as. to dis- 
puted demands and the value of remittances. It appears 
to the court, that the act was designed to strike at common 
schemes of fraud, whereby, through the postoffice, circulars, 
etc., are distributed generally to entrap the unwary and not 
the supervision of commercial correspondence solely between 
debtor and creditor." 

Sec. 218. The defendant in U. S. vs. Haynes, 29 Fed. 
Eep. 691, under the name of Lyons Silk Company, circulated 
through the mails an advertisement, stating that to close out 
remnants he would send by mail, post paid, pieces of silk, all 
of one color or assorted, suitable for making and repairing 
dresses and other garments, 6 pieces for 35 cents, 12 for 60 
cents and 24 for one dollar, none less than seven-eighths of a 
yard in length. In answer to the advertisement he received 
through the mail letters inclosing money from persons who 
supposed they were to receive in return pieces of silk cloth, 
but the defendant sent them, instead, pieces of silk sewing 
thread. Other transactions of a similar character were also 
shown. The defendant was found guilty. 

Sec. 219. In IT. S. vs. Haeflinger, 33 Fed. Eep. 469, 
it was held that where an indictment charged that the defend- 
ant had devised a scheme to defraud by falsely pretending 
in and through certain letters to be seeking information that 
would show and lead the persons to whom the letters were ad- 
dressed to believe that they were heirs to large fortunes in 
England and requesting the remittance of a sum of money by 
said persons to him with the intent to retain the money so in- 
closed, it was not necessary to charge further that the state- 

17 



258 Lotteries, Frauds and Obscenity in the Mails. 

nients in the letter were false. Judge Thayer said: "The 
offense described in the indictment consists in placing a letter 
in the mails in execution of a fraudulent scheme previously 
devised which is intended to be carried out through the 
agency of the Postoffice Establishment. It is not essential 
that the letter written in aid of the scheme shall contain cer- 
tain statements. * * * The important question is 
whether a fraudulent scheme was concocted of the nature de- 
scribed in the indictment and whether the letter in question 
was mailed in furtherance of that scheme." 

Sec. 220. In Stokes vs. IT. S., 15 Sup. Ct. Eep. 618, the 
defendants were convicted of a conspiracy to commit the 
offense described in section 5480, Eevised Statutes, of using 
the Postoffice Establishment for fraudulent purposes. The 
artifice described was one wherein each of the defendants rep- 
resented himself as a dealer in various kinds of merchandise, 
certifying each other to be financially responsible and order- 
ing merchandise from various parties, having no intention of 
paying for the same; on appeal to the Supreme Court of the 
United States the conviction was sustained. 

The court held that where letters were written by the 
defendants and found their way into the mails the jury could 
be authorized to infer that they were deposited in the mail by 
defendants. 

The court held that the following matters must be alleged 
and proved to constitute the offense: 1. That the persons 
charged must have devised a scheme or artifice to defraud. 
2. They must have intended to effect this scheme by opening 
or intending to open correspondence with some other person 
through the Postoffice Establishment or by inciting some other 
person to open communication with them. 3. And that in 
carrying out such scheme such person must either have depos- 
ited a letter or packet in the postoffice or taken or received 
one therefrom. 

Sec. 221. It is not necessary to constitute this crime 
that it should have been the intent of the party devising the 
scheme to defraud more than one person. 



Lotteries, Frauds and Obscenity in the Mails. 259 

This proposition was announced by the Circuit Court of 
the United States for the District of Colorado in Weiber vs. 
U. S., 62 Fed. Eep. 740, in which Mr. Justice Brewer con- 
curred. In that case the scheme for which the defendant 
was convicted briefly stated was this: Stephens was not in 
fact indebted to Kearney. Kearney pretended to have a claim 
against Stephens and placed it in the hands of the defendant 
for collection. A suit was pending by the United States 
against Stephens for the recovery of moneys alleged to be due 
for lumber taken off government lands. The defendant 
caused to be passed through the mails a letter purporting to 
be from the United States District Attorney to himself in ref- 
erence to the furnishing of testimony tending to show Steph- 
ens liable to the government and then caused the letter thus 
passing through the postofnce to be sent by one apparently a 
stranger to Stephens, the intention and expectation being that 
thereby Stephens would be frightened — blackmailed — -into 
paying the claim of Kearney, in defendant's hands for collec- 
tion, in order to prevent any disclosures by defendant to the 
United States District Attorney. 

The court held this to be a scheme to defraud — that it 
was immaterial that it did not result as expected and it was also 
immaterial that it was uncertain, even exceedingly doubtful, 
whether Stephens or any other man would be frightened by 
such a scheme^-that the criminality of the defendant did not 
rest upon the probabilities of success of the scheme, or upon 
the fact of success. 

Sec. 222. The use of a fictitious name is not unlawful 
unless slJ. raudulent business is done in that name and mere in- 
tent is not enough; something must be done. U. S. vs. Smith, 
45 Fed. Eep. 561. 

Sec. 223. In U. S. vs. Beatty, 60 Fed. Eep. 740, where 
the indictment charged that defendant sent to one S. a circular 
which set out in substance and which stated that an organ of 
a particular description worth $150 would be sent him for $33 
warranted for ten years and to be returned within three years 
if not satisfactory, in which event the money would be re- 



260 Lotteries, Frauds and Obscenity in the Mails. 

funded; that by this circular defendant intended to induce 
him to believe that an organ would be delivered to him of the 
character and upon the terms described, whereas he did not 
intend to perform the representations contained in said circu- 
lar but did intend to obtain the said sum of $33 by means of 
the said false pretenses, it was held to be sufficient under sec- 
tion 5480 as amended. The judge (Wheeler) said : "The organ 
proposed by the circular to be sent on receipt of $33 was spe- 
cifically described. That intended by the scheme alleged was 
essentially different. The pretense that such a one as was 
described would be sent was false, even if one as good or better 
was intended to be sent. The particular kind might be mate- 
rial to the purchaser and his money might be obtained by false 
pretenses as to that, although not profitable to the seller." 

Sec. 224. An indictment under section 5480, Revised 
Statutes, as amended by the Act of March 2, 1889 (25 Stat. 
L. 873), for using the mails for promoting a scheme or artifice 
to defraud must show that there was a motive of gain on the 
part of the accused. U. S. vs. Beach, 73 Fed. Eep. 160. In 
that case, the charge was that the prisoner induced the pros- 
ecutor to go to Salt Lake City, Utah, and to expend a consid- 
erable sum of money in making the journey upon the false 
pretense that he could have employment as a nurse from one 
Perkins. Perkins was a mythical person and there was no 
employment for the prosecutor in Salt Lake City. Judge 
Hallett held that the statute in this case was not violated be- 
cause it did not appear that the prisoner gained or hoped to 
gain anything by the scheme. The judge was mistaken in 
one respect, and that is he held the scheme or artifice to de- 
fraud, mentioned in the first of the section, must be limited 
to schemes and artifices as are ejusdam generis with the par- 
ticular schemes named in the subsequent portions of the stat- 
ute. He evidently overlooked the fact that as the section 
originally stood in the Act of 1872 and in the Revision of 
1878, no particular schemes were named but the general words 
"any scheme or artifice to defraud" were used and the specific 



Lotteries, Frauds and Obscenity in the Mails. 261 

schemes were introduced by the Act of March 2, 1889, and 
hence, the rule the judge invokes can not apply. 

This ruling was made prior to the decision of the Su- 
preme Court of the United States in Streep vs. U. S., 160 
IT. S. 126 . 

Sec. 225. The Postofhce Department has held that the 
sale of marked cards or other gambling devices so as to enable 
players to cheat at games with them comes within the. provi- 
sions of sections 5480 and belongs to the class of "Green 
Goods' 7 swindles and the vendors of such cards or devices were 
denied the use of the mails. 

Sec. 226. Another device operated by parties in large 
cities was this : The party would obtain the names of respon- 
sible business men throughout the country and would send to 
them sealed packets containing jewelry of a cheap kind and 
also containing stamps to cover the postage on the package. 
With the inclosures letters were sent, in which the addressees 
were advised that the promoters' took the liberty of sending 
them the jewelry without an order, because it was cheap and 
if the addressees did not desire to keep it and pay for it toreseal 
it in a wrapper and use the inclosed stamps to return it. On 
the outside covers of the packages was printed a statement, 
directed to postmasters, authorizing them to open the packages 
if not taken out of the mails and to use the postage inclosed 
therein to return them to the senders. This all looked 
fair enough on its face but when the addressees opened the 
packages or in case the packages were not called for or not 
accepted by the addressees the postmasters opened and re- 
turned tjaem to the senders the latter would insist that some 
of the articles had been abstracted from the packages and 
demanded pay for the same; and oftentimes the postmasters 
or addressees would pay the required sum, rather than be sub- 
jected to annoying letters, charging them, virtually, with theft. 
The scheme was held a fraud and the postmasters were directed 
by the Postmaster-General not to open any more packages of 
that kind, or any kind, no matter what directions were printed 
on the outside covers or wrappers. 



262 Lotteries, Frauds and Obscenity in the Mails. 

Sec. 227. The mailing of a letter ordering goods in 
pursuance of a plan to defraud by not paying for them under 
the false pretense that the persons, mailing the orders, were 
merchants, is a scheme to defraud, under Sec. 5480, R. S. 

U. S. vs. Watson, 35 Fed. Rep. 358. 

Sec. 228. Brand vs. IT. S., 4 Fed. Rep. 394, was a case 
where the accused perpetrated the fraud by pretending he 
desired to hire agents requiring the applicants to send him 25 
cents. 

Sec. 229. In U. S. vs. Finney, 45 Fed. Rep. 41, the 
defendant was charged with using the mails to carry on a 
scheme to defraud in this that he represented himself to be the 
president of a publishing company which was the manufact- 
urer of standard subscription books, for the sale of which it 
desired to employ agents — the agents were required to deposit 
$25 each for outfits — whereas, in fact, he intended to get the 
$25 and not furnish the outfits or fill orders to agents. Judge 
Thayer instructed the jury "to inquire particularly — first, 
whether the pretense of a desire to employ agents to canvass 
for the sale of books was in reality a false pretense made for 
no other purpose than to induce persons to advance to de- 
fendant $25; and secondly, whether defendant's real purpose 
was to appropriate such money to his own use, without render- 
ing any equivalent for the money received; and, if the jury 
answered both of these inquiries in the affirmative, they would 
be justified in finding the defendant guilty. The Judge went 
on to say that the scheme was not fraudulent simply because 
the publishing company did not manufacture books for sale as 
represented and that the defendant had a right to require a 
deposit for an outfit and to prescribe the terms on which it 
would be returned. The whole question was whether the 
defendant was acting in good or bad faith. 

Sec. 230. A party was indicted for carrying on, through 
the mails, various schemes to defraud. One was that he had 
high-grade seed wheat which he would furnish for a certain 
price per bushel. He received various sums of money from 
various persons, to some of whom he sent the wheat and to 



Lotteries, Frauds and Obscenity in the Mails. 263 

others he did not send it. The judge instructed the jury that 
as the indictment charged the defendant with the intent to de- 
fraud everybody with whom he should come into communica- 
tion, the government must prove it. The judge said, however, 
that it might have been sufficient to allege that the defendant 
intended to defraud some of the persons who should send him 
money. The jury acquitted defendant. IT. S. vs. Staples, 45 
Fed. Eep. 195. 

Another scheme operated by the same party was this: 
He advertised that they had blueberry plants for sale but on 
receipt of money, he would send huckleberry plants which he 
dug in the woods and which did not live after being set out. 
He was convicted under this charge. 

Another scheme he operated was that he would induce 
publishers of newspapers to insert advertisements for which 
he did not intend to pay nor did he pay. He was convicted 
under this charge. In the same case the Judge told the jury 
that the practice of exagerating the value of goods offered for 
sale is not criminal if restricted within reasonable bounds and 
is not done with fraudulent intent. 

Sec. 231. One, who advertises for agents to sell goods 
and distribute circulars with no intention of employing such 
agents but intending to incite persons to send him money for 
agents' outfits without intending any equivalent for the same 
and intends to effect the scheme through the mails, is guilty of 
the offense described in the statute, though it also appears that 
the party has filled all orders made upon him for goods sold. 
U. S. vs. Stickle, 15 Ted. Eep. 798. 

Sec. 232. Many cases have come before the Postoffice 
Department, in which town lots or lands and mining stocks 
were the ground work of the fraud. Parties advertised that 
they had laid out towns, generally in the far distant west and 
would offer the lots therein for sale. Magnificent plats of the 
towns were prepared and liberally distributed among the peo- 
ple with glowing accounts of the flourishing condition of the 
towns. These promoters would adroitly state that they desired 
to get people to build and thus make the other lots more valua- 



264 Lotteries, Frauds and Obscenity in the Mails. 

ble and they would make a deed to anyone desiring it to any 
unsold lot the purchaser might select upon payment of the 
mere cost of preparing and taking the acknowledgment of 
the deed varying in amount from one dollar to two dollars 
<md fifty cents. This proposition seemed so eminently fair 
that large numbers invested the required sum and got their 
deeds but when they wrote to the officers of the county, in 
which the towns were represented to be located, they would 
learn that the locus in quo was in a desert and the towns were 
myths. The way the promoters of these schemes could afford 
to make and acknowledge a deed for a dollar or two was by 
printing all the forms for the deeds and having one of their 
own number appointed notary public so that to them the cost 
of a deed was a very small part of what they received. 

Other parties operated similar schemes, using large tracts 
of land as a basis. When inspectors, upon complaint of the 
victims, were sent to investigate the matter, these lands, rep- 
resented by the swindlers to flow with milk and honey, were 
found to be in the most dreary deserts of the rocky mountains. 

Sec. 233. The most alluring scheme, however, and the 
one that appeals to all classes alike is that in which mining 
stock is offered for sale. Glowing accounts are sent out to the 
effect that the company (these schemes are always operated 
ostensibly under the name of a corporation) owns valuable 
gold, silver, copper or lead mining properties, situated, of 
course, in some remote part of the country and the stock of 
1,000 shares of the par value of $1,000,000 is offered to the 
people at the unprecedentedly low price of ten cents on the 
dollar, in order to raise money, as it is alleged, to develope 
the mines, which the promoter feels sure will yield not only 
large profits but even fortunes to the investors. The people 
bite and then complain and upon investigation the company, 
it is found, either does not own any property at all or has some 
mining claims that would bring in the local market a mere 
pittance. 

It is a difficult matter, though, for the Postoffi.ee Depart- 
ment to prevent these schemes from being operated through 



Lotteries, Frauds and Obscenity in the Mails. 265 

the mails on account of having to get testimony enough to 
show that they are intended as frauds and the Department 
always feels a hesitancy in taking action where a transaction is 
alleged to be fraudulent but which assumes the form of being 
perfectly fair and legitimate. 

Sec. 234. In a case that came before the postoffice De- 
partment the party claimed to have a machine which could 
be so manipulated as to indicate to investors when to buy or 
sell stock or grain or other article, which is usually made the 
subject of "option deals" in the speculative market. The 
machine was not intended to be used for gambling but simply 
to assure would-be speculators of the safety of their invest- 
ments; but the Department, having proof that the owner 
operated a "bucket shop" by means of the machine, that 
men invested large sums of money upon faith in the accuracy 
of the machine induced by the owner, and further that the 
money thus paid was usually lost, held the scheme to be a 
fraud. 

Sec. 235. In conclusion of this branch of the subject 
it may be stated generally that each transaction alleged to be 
fraudulent must be judged by its own facts and it is not deemed 
necessary to undertake to go into further details as to the 
frauds that have been brought to the notice of the Department. 
Enough, it is thought, has been given to elucidate and illustrate 
the general principles, underlying the schemes, which will 
aid the student or official in coming to correct conclusions 
in regard to new cases as they arise. 

MATTER ON POSTAL CARDS, ENVELOPES, OUTSIDE COVERS OR 
WRAPPERS. 

This kind of matter does not come strictly under the head 
of schemes to defraud nor is it prohibited by section 5480 but 
it is so closely related to the subject of that section that it is 
deemed appropriate to treat of it in this chapter. 

Sec. 236. For a history of legislation on this subject see 
section 241, post. It will be observed that as the matter 




266 Lotteries, Frauds and Obscenity in the Mails. 

stood by the Act of June 8, 1872, "scurrilous epithets' 7 on 
postal cards and envelopes were alone prohibited. By the 
Act of March 3, 1873, the word "indecent" was added; by 
the Act of July 12, 1876, the words "lewd, obscene, or lascivi- 
ous" as adjectives and the words "delineations, terms or lan- 
guage" as nouns were inserted and finally by the Act of 
September 26, 1888 (25 Stat. L. 496), the Statute took the 
form in which it stands to-day and is as follows : 

"That all matter otherwise mailable by law, upon the 
envelope or outside cover or wrapper of which, or any postal 
card upon which any delineations, epithets, terms, or language 
of an indecent, or threatening character, or calculated by the 
terms or manner or style of display and obviously intended to 
reflect injuriously upon the character or conduct of another 
may be written or printed, or otherwise impressed or apparent, 
are hereby declared nonmailable matter, and shall not be con- 
veyed in the mails, nor delivered from any postoffice nor by 
any letter carriers, and shall be withdrawn from the mails 
under such regulations as the Postmaster-General shall pre- 
scribe; and any person who shall knowingly deposit, or cause to 
be deposited for mailing or delivery, anything declared by 
this section to be nonmailable matter, and any person, who 
shall knowingly take the same or cause the same to be taken 
from the mails, for the purpose of circulating or disposing 
of or of aiding in the circulation or disposition of the same, 
shall for each and every offense, upon conviction thereof, 
be fined not more than $5,000 or imprisoned at hard labor 
not more than five years, or both at the discretion" of the 
court." 

This amendment materially enlarged the scope and mean- 
ing of the Statute. 

Sec, 237. The following language on postal cards has 
been held to come within the Act of Congress of September 
26, 1888. 

"You have been fighting time all along. * * * I 
will garnishee and foreclose. But I dislike to do this if you 
will be half white." U. S. vs. Smith, 69 Ted. Eep. 971. 



Lotteries, Frauds and Obscenity in the Mails. 267 

"It is with regret that I once more ask you to take your 
choice, I will vindicate myself if I live. The truth and the 
whole truth must come out." Griffin vs. Pembroke, 2 Mo. 
App. Rep. 980. And in the same case it was held that ex- 
traneous evidence was not admissible to show the language on 
a postal card on its face threatening or abusive was not so 
intended by the sender and so understood by the sendee. 

"You are sharp, all of you are on the beat." U. S. vs. 
Davis, 38 Fed. Rep. 326. But in the same case it was held 
that the use of the words: "Tell that Rascal to send my book 
back as he agreed" did not necessarily reflect on the character 
of the addressee. 

"Mr. Editor : I thought that you was publishing a paper 
for the wheel but I see nothing but rotten Democracy. I am 
a Republican and a wheeler, and you can take your paper and 
Democracy and go to hell with it." IT. S. vs. Olney, 38 Fed. 
Rep. 328, ^N"ote. The court declined to charge the jury that 
this language was a matter of law scurrilous but left it to the 
jury as a question of fact if the words were scurrilous and the 
jury returned a verdict of guilty. 

"Your rent was due Thursday, Feb. 25, 1892, and has 
not been paid and if not paid by Thursday, March 3d, 1892, 
I will place the matter in the hands of an officer." IT. S. vs. 
Elliott, 51 Fed. Rep. 807. 

"You have promised and do not perform and I see very 
plainly you do not intend to pay any attention to my letters 
or your agreements." U. S. vs. Simmons, 61 Fed. Rep. 640. 

"Please call and settle account, which is long past due and 
for which our collector has called several times and oblige." 
IT. S. vs. Boyle, 40 Fed. Rep. 664. This language was held 
not to come under the statute but in the same case it was held 
that a postal card, demanding payment of a debt and stat- 
ing that "if it is not paid at once we shall place the same with 
our lawyer for collection is not mailable. 



268 Lotteries, Frauds and Obscenity in the Mails. 



ENVELOPES AND OUTSIDE WRAPPERS. 

Sec. 238. A party may send respectful dunning letters 
in an unsealed envelope on which are printed the words, 
"Mercantile Protection and Collection Bureau" in display 
letters of "10 points or long primer French Clarenden type." 
In Ee Barber, 75 Fed. Kep. 980. 

A letter inclosed in an envelope on which the words 
"Excelsior Collection Agency" are printed in very large full 
faced capital letters which occupy more than half of the 
envelope and are so placed as to be entirely separate from the 
direction to return to the sender is a violation of the Act. 

U. S: vs. Brown, 43 Fed. Kep. 135. 

THE OUTSIDE COVER OR WRAPPER OF MAIL MATTER. 

Sec. 239. There has been a difference of opinion as to what 
is the meaning of these words. The Assistant Attorney-General 
for the Postofnce Department has uniformly held that they in- 
clude only covers or wrappers, as distinct from the mail matter 
itself, unless the objectionable words appear in connection 
with the address so as to constitute a part of it. Thus it has 
been held that if the mail matter has no cover or wrapper 
in the strict sense and the address is written on the matter itself 
as on a newspaper or circular and the objectionable words are 
written or printed in such form that they would probably 
be seen by one reading the address, it is drawn within the terms 
of the stature. But it makes no difference that the objectiona- 
able words may be written or printed on the paper or circular 
or other thing, if they do not appear with the address or near it. 

In TJ. S. vs. Gee-, 45 Fed. Kep. 194, four page circulars 
were folded oblong and postage stamps placed on the circulars 
themselves. The circulars were about the size of a sheet of 
note paper, upon all four pages of which was printed matter 
and on the outside pages was language "calculated by its terms 
* * * and obviously intended to reflect injuriously upon 
the character and conduct of another." Jud^e Severens di- 



Lotteries, Frauds and Obscenity in the Mails. 269 

rected a verdict for defendant on the ground that the statute 
applies only to matter exhibited upon an inclosing wrapper or 
cover and not to matter which is contained in the body of the 
thing mailed; that "the statute being one constituting a 
criminal offense, it can not be extended by construction to 
cases where there is no wrapper or cover at all, even though 
such cases may be within the reason and policy of the enact- 
ment." 

A different view of this question was, however, taken in 
U. S. vs. Burnell, 75 Fed. Eep. 825. In that case it appeared 
that a newspaper called "The Inter-State Tracer" was pub- 
lished by Burnell, Secretary of the State Business Men's Asso- 
ciation of Iowa. The paper consisted of 16 pages about 9 x 
12 inches. At the top of the outside (front) page appeared 
the title, date, number of current issue, etc. Upon this front 
(outside) page, under headings printed in large full faced type 
of "Wanted" and "Warning," various notices and paragraphs 
were printed. All the copies of the paper sent to the same 
postoflice were rolled up together in one package in one wrap- 
per and on this wrapper was written the name of the postoflice. 
The subscribers' names were written on the front (outside) 
pages of the paper. When the package reached the postoflice, 
the postal employees tore off the wrapper in order to find the 
names of the persons, to whom the papers were to be delivered. 
If any of these notices had been written on a postal card and 
sent through the mails, the card would unquestionably have 
come within the Act of September 26, 1888. 

The Judge (Woolson), held that the front page of the 
paper was a "cover" within the meaning of the Statute quoting 
from a letter, written by the Assistant Attorney-General for 
the Postoflice Depeartment to the defendant in 1896, as fol- 
lows: "In an opinion rendered by Hon. J. X. Tyner, As- 
sistant Attorney-General for the Postoflice Department, June 
6, 1891, a 'cover' is defined as that which overlays or over- 
spreads ; and a 'wrapper' that in which something is inclosed. 
In accordance with the above scurrilous matter appearing upon 
the outside or overlaying portions of mail matter may be con- 



270 Lotteries, Frauds and Obscenity in the Mails. 

sidered to be upon the cover thereof." The Judge did not 
think it made any difference whether the outside leaf had 
printed matter for the public on it or was simply a cover with 
the title, number and date of the paper on it, or that the out- 
side pages were of a different color from the other parts of the 
paper or all of the same color or that the cover was consecu- 
tively numbered with the other pages. The scurrilous matter 
on the outside page of the Tracer was held to come within 
the Statute on the ground that the postal officers must look 
at this page to ascertain the name of the addressee and in 
doing this the "manner and style of display" (in the heavy 
black faced type) were calculated to draw their attention to the 
objectionable matter to a greater degree than matter on the 
side of a postal card opposite the address. The matter on this 
page was in plain view of the official when reading the name 
of the addressee. 

WHAT ARE DELINEATIONS. 

Sec. 240. The Postoffice Department held that to bring 
the matter within the meaning of "delineations" as used in this 
Statute there must be some mark, writing or printing, etc., and 
that the mere color of the envelope, cover or wrapper is not 
embraced in the meaning of this word. But Judge Butler in 
U. S. vs. Dodge, 70 Fed. Bep. 235, held otherwise. The de- 
fendant in that case sent duns to debtors in black envelopes 
with nothing on them but the address. The Judge, holding 
the use of this envelope to be a violation of the law, said: 
"The' evidence shows that all persons connected with the pos- 
tal service understood the meaning and object of this method 
of proceeding. The object is to coerce payment of money by 
thus exposing the person addressed." 

He then went on to say that the black of the envelope was 
a "delineation" within the meaning of the Statute. 



CHAPTEE V. 

OBSCENE MATTER IN THE MAILS. 

Sec. 241. The first time Congress dealt with this ques- 
tion was by the Act of June 8, 1872 (17 Stat. L. 302), section 
148 of which provided "That no obscene book, pamphlet, 
picture, print or other publication of a vulgar, or indecent 
character, or any letter upon the envelope of which, or postal 
card upon which scurrilous epithets may have been written or 
printed or disloyal devices printed or engraved thereon, * * * 
shall be carried in the mail." 

This section was amended by the Act of March 3, 1873 
(17 Stat. L. 599) so as to read as follows: "That no obscene, 
or lascivious book, pamphlet, picture, paper, print, or other 
publication of an indecent character, or any article or thing 
designed or intended for the prevention of conception or 
procuring of abortion, nor any article or thing intended or 
adapted for any indecent or immoral use or nature, nor any 
written or printed card, circular, book, pamphlet, advertise- 
ment or notice of any kind, giving information, directly or 
indirectly, where or how or of whom or by what means either 
of the things before mentioned may be obtained or made, or 
any letter upon the envelope of which or postal card upon 
which jndecent or scurrilous epithets may be written or printed 
shall be carried in the mails." 

This section was again amended by the Act of July 12, 
1876 (19 Stat. L. 90) by inserting the word "writing" before 
the word "print" therein and for the provision in regard to 
envelopes and postal cards the following was substituted; "and 
every letter, upon the envelope of which or any postal card 
upon which indecent, lewd, obscene or lascivious delineations, 

271 



272 Lotteries, Frauds and Obscenity in the Mails. 

epithets, terms, or language may be written or printed," was 
declared to be nonmailable. 

This section, as thus amended, went into the Revised 
Statutes of J 878 as section 3893; and it was again amended by 
the Act of September 26, 1888 (1 Sup. R. S. 621); and as 
thus amended the section stands now and reads as follows: 
"Every obscene, lewd, or lascivious book, pamphlet, picture, 
paper, letter, writing, print, or other publication of an indecent 
character, and every article or thing designed or intended for 
the prevention of conception or procuring of abortion, and 
every article or thing intended or adapted for any indecent or 
immoral use, and every written or printed card, letter, circu- 
lar, book, pamphlet, advertisement, or notice of any kind giv- 
ing information, directly or indirectly, where or how or of 
whom or by what means any of the hereinbefore mentioned 
matters, articles, or things may be obtained or made, whether 
sealed as first class matter or not, are hereby declared to be 
nonmailable matter, and shall not be conveyed in the mails 
nor delivered from any postoffice nor by any letter carrier, 
and any person who shall knowingly deposit, or cause to be 
deposited, for mailing or delivery, anything declared by this 
section to be nonmailable matter, and every person who shall 
knowingly take the same, or cause the same to be taken, from, 
the mails for the purpose of circulating or disposing of or 
of aiding in the circulation or disposition of the same, shall, 
for each and every offense, be fined upon conviction thereof 
not more than $5,000 or imprisoned at heard labor not more 
than -five years, or both, at the discretion of the court." 

It will be observed that the amendment of September 26, 
1888, materially enlarges the scope of the Statute as to obscene 
matter but omits entirely the provision in regard to matter on 
envelopes and postal cards which with material amendments 
was enacted into a separate Statute at that time. 

Sec. 242. Matter is said to be obscene when its tendency 
is to excite libidinous thoughts and desires or to corrupt and 
deprave those, whose minds are open to such immoral influ- 
ences and into whose hands it may fall. Queen vs. Hicklin, 



Lotteries, Frauds and Obscenity in the Mails. 273 

3 Eng\ L. K. Q. B. 360; U. S. vs. Bennett, 16 Blatch, 338; 
IT. S. vs. Harmon, 45 Fed. Eep. 414; IT. S. vs. Smith, 45 Fed. 
Eep. 476; XI. S. vs. Clarke, 38 Fed. Eep. 372; IT. S. vs. Clies- 
nian, 19 Fed. Eep. 732; IT. S. vs. Slenker, 32 Fed. Eep. 691; 

-^Swearingen vs. IT. S., 161 IT. S. 446. "Persons publishing 
books, necessary for medical instruction, may be liable for 
uttering obscene libels, if the effect is to debauch society or to 
make money by pandering to lascivious curiosity. That the 
object is philanthropic or scientific is no defense." 2d Whar- 
ton Cr. Law, Sec. 2545. In support of this proposition the 
learned author cites Com. vs. Landis, 8 Phila. 453 and E. vs. 
HickKn, supra. In the Landis case, an obscene medical book 
was the basis of the prosecution. The defendant claimed 
that the book was a scientific, medical publication, containing 
matter taken from standard medical works, but the book was 
for general dissemination and he was convicted. In that case 
the jury was instructed "that it did not matter whether the 
things published in the book were true and in conformity to 
nature and the laws of our being or not. If they were unfit 
to be published and intended to inflame lewd passions, it was 
an obscene libel. That even scientific and medical publica- 
tions, containing illustrations, exhibiting the human form, 
if wantonly exposed in the open market, with a wanton and 
wicked desire to create a demand for them and not to promote 
the good of society by placing them in proper hands for 
useful purposes, would, if tending to excite lewd desires, be 
held to be obscene libels." To the same effect is the Slenker 

, and the Swearingen cases, supra. In the case of IT. S. vs. 
Clarke, mpra, the matter complained of was first, a small 
pamphlet in paper cover, entitled "Dr. Clarke's Treatise on 
Venereal, Sexual, Nervous and Special Diseases," and con- 
sisted mainly of a description of the causes and effects of vene- 
real diseases; and secondly, of two circulars one of which de- 
described, in separate paragraphs, the symptoms of various ve- 
nereal diseases and the other contained a list of questions to be 
answered. That was a prosecution for sending this pamphlet 
18 



274 Lotteries, Frauds and Obscenity in the Mails. 

and these circulars through the mails in violation of the Fed- 
eral Statute against obscenity. Judge Thayer, charging the 
jury, said: ''There is to be found in every community a class 
of people, who are so intelligent or so mature, that their minds 
are not liable to be affected by reading matter, however, ob- 
scene, lewd, or indecent it may be. Then there is another 
large class to be found in every community — the young, im- 
mature, the ignorant and those who are sensually inclined — 
who are liable to be influenced to their harm, by reading in- 
decent and obscene publications. The statute, under which 
this indictment is found, was designed to protect the latter 
class from harm, and it is a wholesome statute. Hence, in 
judging of the tendency of the publications to deprave and 
corrupt the mind, or to excite lustful or sensual desires (which 
are the test of obscenity and lewdness) you should consider the 
effect, that the publications would have on the minds of that 
class of persons, whom the statute aims to protect, and the 
liability of the publications to get into the hands of that class 
of persons, rather than the effect such publications would have 
on people of a high order of intelligence and those who have 
reached mature years, who, by reason of their intelligence, or 
years, are steeled against such influences. " Judge Thayer also 
told the jury that a physician could communicate, through 
the mails, to his patient in terms, that would otherwise be 
obscene, but before he could do this, the relation of patient 
and physician must exist, and he also held that the pamphlet 
and circulars in that case could not be considered standard 
medical works or publications. The indictment in the case of 
U. S. vs. Chesman, supra, describes the publication as "A 
pamphlet entitled 'Prof . Harris' ~New Discovery for the Radi- 
cal Cure of Spermatorhoea and Impotency, with the Anatomy 
and Physiology of the Generative Organs, illustrated ; and the 
science of a Radical Cure,' by his new departure, in the 
treatment of those troubles, viz., local absorption at the seat 
of the disease." The question presented to the court was 
whether the publications, complained of, came within the pro- 
vision of section 3893, R. S., and McCreary, J., said: "We 



Lotteries, Frauds and Obscenity in the Mails. 275 

have considered this question after a full oral argument by 
counsel, and we are clearly of the opinion that the publica- 
tions, referred to in the indictment and information, do fall 
within the provisions of this section of the statute. They are 
clearly both obscene and indecent, and in our opinion within 
the meaning of the statute. It is not necessary perhaps, to say 
more, but I may remark that it has been insisted by counsel 
for defendant, with great earnestness, that the publications, 
in question, are in their character, medical, and that the mat- 
ters complained of are, to a large extent, extracts from medical 
standard works. It may be, and probably is true that much 
of the offensive matter is taken from books upon medicine and 
surgery, which would be proper enough for the general use 
for members and students of the profession. There are many 
things in the standard works upon these subjects, which, if 
printed in pamphlet form and spread broadcast among the 
community, being sent through the mails to persons of all 
classes including boys and girls, would be highly indecent and 
obscene." The publication set out in the indictment in the 
case of IT. S.vs.Harmon, supra, was an article in a paper called 
"Lucifer" headed "A Physician's Testimony," purporting to 
be written by one, Richard V. O'Neill, M. D. The doctor 
in this communication set out, with great particularity, various 
instances, falling within his professional experience and prac- 
tice, of abuses of women by their husbands in coercive cohab- 
itations ; of family habits of men, boys and girls, gratifying an 
unnamable propensity, and the unnatural intercourse 
between a man and beasts. These acts were described in 
blunt, coarse terms, too indecent to be set out in a state- 
ment of the case in haec verba. The defendant was per- 
mitted to testify that his motive in publishing such articles, 
was to improve the sexual habit, to correct its abuse, and 
thereby better the human race ; and it was shown by evidence 
that in all other relations of life, he bore a good character as 
a peacable, well conducted citizen. Judge Phillips said: 
"Laws of this kind are made for society in the aggregate, and 
not in particular. How would the language, the subject-mat- 



276 Lotteries, Frauds and Obscenity in the Mails. 

ter in this article from the pen of Richard Y. O'Neill, M. D., 
impress and affect the average man and woman of intelligence 
and sensibility? What is its probable effect upon society in 
general? How would such language and matter impress a 
public assembly of decent men and women? The subjects 
discussed and the language employed are too coarse, and in- 
decent for the man of average education and refinement to 
recapitulate." And the judge held that it made no difference 
how pure the motives of the defendant may have been in the 
publication of such matter. In the U. S. vs. Smith, supra, it 
appeared that the defendant mailed a pamphlet entitled "A 
Monitor for Men," which purported to be a medical treatise 
touching certain foul diseases and their cure and a pamphlet 
entitled "Questions for Men Only," which consisted "of 120 
printed questions touching some seven private diseases;" both 
of the pamphlets purporting to be issued by "Gun Wa, Chim 
ese Graduate of Botany." Judge Jenkins said: "It is said 
of this pamphlet that it is a medical treatise without illustra- 
tion, and with a possible exception, expressed in clean and 
wholesome language. In an able argument, the counsel for 
the defendant asserted that it was the highest duty to instruct 
the youth in the anatomy of the human body, and the laws 
of its nature, warning them of the grievous result flowing from 
infraction of such law; and that a work, upon such a subject, 
devoid of filthy language, can not be properly classed as 
obscene. Whether an act or language is obscene depends upon 
circumstances. The public exposure of the person is most ob- 
scene, yet the necessary exhibition of the person to a physician 
is not only innocent, but is a proper act, dictated by positive 
duty. The condition determines the quality of the act. Thus 
the nude in art is not of necessity indecent but it may be so 
conditioned as to^come under the ban of condemnation. 

Here is a publication touching certain loathsome diseases 
of the generative organs. Such a document, intended for 
general circulation, liable to fall into the hands of the im- 
mature, might well be corrupting. It is of no consequence 
that the language employed may be pure. The law has rela- 



Lotteries, Frauds and Obscenity in the Mails. 277 

tion as well to the subject as to its dress. Both the subject 
and its treatment must be free from obscenity." 

This eminent Judge also holds that a physician may com- 
municate through the mails with his patient in language that 
would, under other circumstances, be obscene, but before he 
can do that, the relation of physician and patient must first 
exist. It being conceded that a physician can use the mails in 
the treatment of his patient, another question confronts the De- 
partment and that is, when does the relation of physician and 
patient, in a legal sense, exist ? It may be answered that this re- 
lation exist? when there is a contract express or implied, by 
which the physician binds himself to treat the patient and the 
patient consents to be treated. This question has often arisen 
in the courts when called upon to determine when the relation 
of physician and patient exists, so as to come within the rule 
forbidding the former to testify as to confidential communica- 
tions made to him by the latter. A doctor who advertises in 
the public press that he will send his publications to any one 
calling for them can not, in any proper sense, be held to occupy 
the relation of physician to those, who do call for them. These 
medical pamphlets are usually sent out promiscuously to the 
public for the purpose of advertising the medicines, or ap- 
pliances of those, sending them out. To authorize their trans- 
mission through the mails, if obscene, the sender must occupy 
the relation of physician to those to whom they are sent and 
when the relation does exist there is no motive for sending 
what was simply and originally intended as an advertisement 
to induce the creation of that relation. 

Sec v 243. The Supreme Court of the United States in 
Swearingen vs. U. S., supra, held that the words "Obscene, 
lewd or lascivious," as used in section 3893, R. S., refer only 
to publications which are immoral by reason of their relation to 
sexual impurity, the words having the same meaning as given 
them at common law in prosecutions for obscene libel. 

And this was the ruling in U. S. vs. Wightman, 29 Fed. 
Rep. 636, where it was held that a letter, although exceedingly 
coarse and vulgar and grossly libelous imputing to the person 



278 Lotteries, Frauds and Obscenity in the Mails. 

addressed an atrocious crime — but which has no tendency to 
excite libidinous thoughts or to corrupt the morals of those 
whose minds are open to such influences, is not obscene,lewd or 
lascivious within the meaning of section 3893. 

Sec. 244. There has been in the courts a contrariety 
of opinion whether a private sealed letter came within the 
meaning of this statute. Some courts vigorously insisted that 
a letter did not come within the meaning of the act because 
it was not a publication. IT. S. vs. Clark, 43 Fed. Rep. 574; 
U. S. vs. Wilson, 58 Id. 768; U. S. vs. Warner, 59 Id. 305; 
and U. S. vs. Jarvis, 59 Id. 357; while others contended that 
a letter came within the Act. U. S. vs. Andrews, 58 Fed. 
Rep. 86; In Re Wahl, 42 Id. 822; IT. S. vs. Martin, 50 Id. 
918; IT. S. vs. Nathan, 61 Id. 936; and IT. S. vs. Ling, 61 
Id. 1001. Then there came the case of Grimm vs. U. S. 156 
IT. S. 604, followed by Andrews vs. IT. S., 162 IT. S. 420,. 
in which the Supreme Court of the United States distinctly 
held that the mailing of a private sealed letter containing ob- 
scene matter, on the envelope of which nothing appears ex- 
cept the name and address, is an offense within the Statute. 

Sec. 245. In the U. S. vs. Lamkin, 73 Fed. Rep. 459, it 
was held that there is no Statute providing a punishment for 
the mailing of letters which are free from lewd and indecent 
language, expressions or words, although they may have been 
written for the purpose of seduction or to obtain meetings for 
immoral purposes. 

This case is in conflict with IT. S. vs. Martin, 50 Fed. Rep. 
918, where it was held that a letter from a man to an unmar- 
ried woman, proposing a clandestine trip to a neighborhood 
town to return next morning, he to pay expenses and five dol- 
lars besides, is an obscene letter within the meaning of the 
Act making such matter nonmailable although it contains no 
words which are themselves obscene. And the Lamkin case 
seems to be in conflict also with the decision of the Supreme 
Court of the United States in Dunlop vs. U. S., 165 U. S. 486,; 
where it was held that advertisements, published by a news- 
paper giving information where courtesans could be found, 



Lotteries, Frauds and Obscenity in the Mails. 279 

came within the Act, although such advertisements were 
couched in the most chaste and elegant language. The decis- 
ion of the Supreme Court is substantially to the effect that any 
publication, which appeals to and is calculated to excite the 
sexual passion, is obscene Avithin the contemplation of the 
law. And the rule thus laid down embraces certain news- 
papers which deal entirely or chiefly in the escapades of men 
and women in respect of their sexual relations, though at one 
time the Postofnce Department did not go to the extent of 
excluding such papers from the mails; and the question of 
their mailability under this law has not been before the 
Federal courts. Some of the States took up the question, 
however, and passed statutes to cover them and these statutes 
have been upheld by the State Courts. 

Sec. 246. On a prosecution for mailing obscene matter, 
defendant is not entitled to an acquittal merely because he did 
not know that the matter might be characterized as obscene. 
Knowing what matter is to be published he must determine at 
his peril whether it be obscene or not, Eosen vs. U. S., 161 
TJ. S. 29. 



CHAPTER VI. 

THE ADMINISTRATION OF THE LAW BY THE POSTOFFICE 
DEPARTMENT. 

Sec. 247. This chapter will be devoted to a discussion of the 
questions that have arisen and that will probably arise relative 
to the administrative provisions of the laws against lotteries, 
frauds and obscene matter. In the preceding chapters the dis- 
cussion was directed to the general rules by which lottery and 
fraudulent schemes and obscene matter might be known but 
when the prohibited matter is found in the mails or is offered 
for mailing, other serious and embarassing questions arise in 
regard to what action shall be taken to prevent the advertise- 
ment of the prohibited schemes or matter through the mails. 
It will be observed that Congress has seen fit to deal with the 
different classes of nonmailable matter in different ways. 
As to lottery and fraudulent schemes the laws provide three 
remedies, first, by indictment, trial and punishment; second, 
by excluding open, i. e., unsealed matter from the mails and 
third by issuing what is known as a "fraud order" against the 
promoter, which directs the postmaster to refuse to deliver to 
him any mail matter whatever but as to obscene matter two 
remedies only are provided. One is by indictment and the 
other is by excluding open matter from the mails. The Post- 
master-General is not authorized to issue fraud orders against 
parties sending obscene matter through the mails though no 
good reason for this can be perceived where the party's busi- 
ness is dealing in such matter. 

280 



Lotteries, Frauds and Obscenity in the Mails. 281 

It is not proposed in this treatise to notice the enforce- 
ment of these laws so far as the courts are concerned, but to 
examine the methods provided by law, by which the Postoffice 
Department can and does take direct action on the prohibited 
matter and against the promoters of fraudulent and lottery 
schemes and to discuss the constitutional and legal questions 
that have arisen in the administration of these laws. 



THE METHODS PROVIDED BY LAW EOE THE ENFORCEMENT OF 
THESE LAWS BY THE POSTOFFICE DEPARTMENT. 

Sec. 248. The Department is authorized to act directly 
against the prohibited matter itself when it is open, or unseal- 
ed. The Department has no right under the law to open a seal- 
ed packet for any purpose whatever, though it be addressed to 
a party or company known to be conducting a lottery or fraud- 
ulent scheme through the mails. This proposition is settled not 
only by the express terms of the laws themselves but also by 
the decisions of the courts and the Postoffice Department and 
Department of Justice. One exception to this rule must be 
noted, however, and that is the Postmaster-General claims the 
power and lias exercised the power to open sealed letters and 
to refuse to carry letters addressed to the enemies of our I 
country in time of war. This power is not expressly conferred 
by law but it is exercised under the war power. During the 
recent Spanish-American War the Postmaster-General di- 
rected that all letters addressed to the Spanish Minister after 
his departure from Washington City and other Spanish Offi- 
cials be seized and opened but so far as known the contents of 
these letters have not been made public. 

So sacred has the seal of mail matter been regarded by the 
Postoffice Department that even a packet that is sealed when 
mailed but which is broken open accidentally or even by design 
during transit is held to be still constructively under seal and 
must be delivered according to the directions thereon, though 
it pertains to a lottery or fraudulent scheme, or contains other 



282 Lotteries, Frauds and Obscenity in the Mails. 

prohibited matter. This rule, however, is not observed in 
England or Continental Europe. The heads of the Postal 
Establishments there possess the power to issue orders for the 
seizure and opening of letters, whenever it is believed the 
seal covers prohibited matter and especially treasonable matter. 
79 Hanzard's Par. Debates, 318 and May's Conn. His. 282. 
In England this power is seldom exercised at this time. The 
people are there, as they are here, restive under a practice of 
prying into correspondence which, they deem, ought to be con- 
fidential and personal. 

But an important question may be raised and that is what 
is matter under seal and what is to be held to be open matter. 
In answer to this question it may be stated that sealed matter 
does not include letters or packets of letters only, but a party 
has a right under the Postal Laws and Regulations to seal any 
matter whatsoever and in that case the postal authorities have 
no right to break the seal to ascertain what is contained 
therein. Whenever mail matter is sealed, however, letter 
postage must be paid and as a rule the amount of the postage 
required deters the sender from sealing any package, except 
what is strictly defined as first class matter. 

But this is not universally true, especially in regard to 
obscene matter. Ordinarily the senders of that kind of mat- 
ter seal it so as to prevent detection though the postage is 
largely increased thereby. 

In this connection another question may be raised and 
that is what is a seal, when applied to mail matter ? To 
constitute a sealed packet the whole of the matter inclosed 
must be covered and concealed from view, as in an envelope 
or closed cover or wrapper. It is not sufficient that the. seal 
of the cover or wrapper be such that it has to be broken in 
order to see whai is contained therein. Second, third and 
fourth class matter is often wrapped and the wrapper or cover 
sealed so that it is impossible to know what is contained therein 
without breaking the seal. Indeed the regulations of the 
Postoffice Department require that matter belonging to these 
classes shall be so wrapped and covered as to make it easy for 



Lotteries, Frauds and Obscenity in the Mails. 283 

the postal officials to examine it. These officials are authorized 
to break the seals on covers of this matter when the matter is 
not wholly inclosed in the sealed cover or wrapper to see 
whether the matter be mailable or not, when they have reason 
to believe it should not be transmitted through the mails. 
And there Is but little doubt if a package of unmailable matter 
of the second, third and fourth classes should be sealed by the 
sender in order to prevent its exclusion from the mails and 
the package should be accidentally broken open during transit, 
the postal officials would have the right to treat it as if it had 
never been under seal. The rule above stated in regard to 
matter under seal, when the seal is broken during transit, ap- 
plies only to letters or matter wholly or partly in writing. 

Sec. 249. Open matter, that is found to pertain to lottery 
or fraudulent schemes or to be obscene, or scurrilous matter 
upon postal cards, envelopes, covers or wrappers, should not be 
received by postmasters for mailing but if it should be in- 
advertently received it should be withheld from further trans- 
mission through the mails, and forwarded to the Postoffice De- 
partment unless the postmasters be in doubt about what disposi- 
tion they ought to make of the matter in a given case, when 
they should withhold the matter and notify the Department. 
If the matter be nonmailable and is clearly of no value, 
except to those who desire to violate the law, the Department 
directs the postmasters to destroy it, otherwise it is ordered to 
be sent to "Washington to be disposed of. After the matter 
reaches the Department at Washington either through the 
action of the postmasters on their own motion or by order 
of the Eostmaster-General it is usually destroyed if it be found 
to be of the prohibited class. Postal clerks on postal cars and 
other officials handling mail matter at postoffices or in transit 
are required to withhold matter deemed by them to be non- 
mailable until they can be advised by those higher in au- 
thority what to do with it. 

The postmasters and other postal officials are required to 
treat matter of foreign origin as they treat domestic matter. 
It makes no difference that a newspaper has been printed and 



284 Lotteries, Frauds and Obscenity in the Mails. 

mailed in a foreign country. As soon as it reaches our shores 
and comes under our jurisdiction it is excluded from the mails 
if it be found to contain prohibited matter ; It was once 
thought that the comity of nations required us to carry, with- 
out question, any matter that citizens of foreign governments 
might send us but this doctrine has been exploded and the right 
of each government to refuse to carry matter forbidden by its 
laws is now recognized by a formal regulation of the Universal 
Postal Union. The Supreme Court of the United States in 
v ^ the Horner Case went to the extent to decide that we could 
not only exclude from the mails even foreign government 
bonds and the advertisement of them if they contained the lot- 
tery element, but also make it a criminal offense to advertise 
or sell such bonds by mail. 

Sec. 250. But the power of the Postmaster-General 
goes beyond dealing simply with open matter, so far as lottery 
and fraudulent schemes are concerned. Under sections 3929, 
and 4041, R. S., he has authority, upon evidence satisfactory 
to him, to issue what is known as a "fraud order" against the 
party who, he finds, is conducting such a scheme through the 
mails. This order directs the postmaster, to whom it is ad- 
dressed or in case of a foreign scheme, when it is addressed to 
all postmasters in the United States, to refuse to deliver to the 
party any matter whatever under seal and to refuse to pay 
any postal money order to him. 

The form of such order, now in use, is as follows : 
"It having been made to appear to the Postmaster-Gen- 
eral, upon evidence satisfactory to him, that is engaged 

in conducting a scheme or device for obtaining money through 
the mails in violation of the act of Congress entitled 'An Act to 
amend certain sections of the Kevised Statutes relating to lot- 
teries, and for other purposes,' approved September 19, 1890. 
Now, therefore, by authority vested in him by said Act and by 
the Act of Congress entitled 'An Act for the suppression of 
lottery traffic through international and interstate commerce 
and the postal service, subject to the jurisdiction and laws of 
the United States ,' approved March 2, 1895, the Postmaster- 



Lotteries, Frauds and Obscenity in the Mails. 285 

General hereby forbids you to pay any postal money order 
drawn to the order of said party or parties, and you are hereby 
directed to inform the remitter of any such postal money order 
that payment thereof has been forbidden, and that the amount 
thereof will be returned upon the presentation of a duplicate 
money order applied for and obtained under the regulations 
of the Department. 

And you are hereby instructed to return all- letters, 
whether registered or not, and other mail matter which shall 
arrive at your office directed to the said to the postmas- 
ters at the offices at which they were originally mailed, to be 
delivered to the senders thereof, with the word 'Fraudulent' 
plainly written or stamped upon the outside of such letters or 
matter. Provided, however, that where there is nothing to in- 
dicate who are the senders of letters not registered or other 
matter, you are directed in that case to send such letters and 
matter to the Dead Letter Office with the word 'Fraudulent' 
plainly written or stamped thereon, to be disposed of as other 
dead matter under the laws and regulations applicable 
thereto." 

The power thus conferred upon the Postmaster-General 
and its influence in the administration of the Postal System 
will not be further examined at this time as the subject more 
properly falls under the third and fourth questions involving 
the constitutionality of these laws hereafter stated. When 
those questions are reached in their order this power will be 
fully discussed. 

CONSTITUTIONAL AND LEGAL QUESTIONS THAT HAVE ARISEN IN 

REGARD TO THE ADMINISTRATIVE FEATURES 

OF THESE LAWS. 

Sec. 251. It can be readily perceived that in a country 
having an area and population like ours many serious and 
delicate questions, affecting the personal and property interests 
of the people in the administration of our vast postal system, 
would arise and continue to arise until they have been decided 
so many times that further agitation or contention is deemed 



286 Lotteries, Frauds and Obscenity in the Mails. 

futile by those who desire to use the mails for prohibited pur- 
poses. The distinct questions, that have arisen with regard to 
these laws in general, whether in their application to the 
judicial powers conferred on the courts or to the administrative 
and ministerial duties imposed upon the Postoffice Department 
are: 

First. Are these laws unconstitutional because they de- 
prive the citizen of his property and liberty without due pro- 
cess of law ? 

Second. Are they unconstitutional because they abridge 
the freedom of the Press in violation of the Constitution of the 
United States ? 

Third. Had Congress the power to authorize the Post- 
master-General to issue a fraud order against a party, who, he 
found on evidence satisfactory to him, was conducting a lottery 
through the mails, forbidding the delivery of registered letters 
or the payment of postal money orders to him? 

Fourth. And had Congress the power to enact the fourth 
section of the Act of March 2, 1895, by which the Postmaster- 
Greneral was authorized to issue a fraud order against a party 
found to be conducting through the mails a fraudulent or lot- 
tery scheme, forbidding the delivery of any sealed mail matter 
whatever to him? 

The first two questions have been fully and finally settled 
by the Supreme Court of the United States, the third has been 
determined several times by the inferior courts of the United 
States but not by the court of final resort and the fourth is still 
pending and has not been conclusively decided one way or the 
other. 

Do these laws deprive the citizen of his property or liberty 
without due process of law and do they abridge the freedom of 
the Press in violation of the Constitution of the United States ? 
This question embodies the first two questions propounded 
above and it has been answered in the negative in both its 
aspects by the Supreme Court of the United States. 

Sec. 252. The first time any constitutional question in 
respect to the Anti-Lottery Statute of Congress came before 



Lotteries, Frauds and Obscenity in the Mails. 287 

the Supreme Court of the United States was in May, 1878, in 
the matter of Orlando Jackson, 96 U. S. 727. Jackson, hav- 
ing been convicted and sentenced to pay a fine for depositing 
in the mails a circular concerning a lottery, applied to that 
court for a writ of Habeas Corpus and asked to be discharged 
from custody on the ground that the act, under which he was 
convicted, was unconstitutional and void. In that case, 
counsel for petitioner argued that "as all letters and packets 
were mail matter at the time of the adoption of the Constitu- 
tion, they must always be carried without restriction or quali- 
fication except in the nature of reasonable regulation while 
the duty of carrying the mails is imposed upon Congress;" 
and "with respect to letters and packets Congress has no alter- 
native but to carry them, irrespective of the intelligence they 
convey or abandon the postal system entirely and remit the 
entire subject to the people with whom it originally rested." 
It was argued further "that Congress has no power to prohibit 
the transmission of intelligence, public or private, through the 
mails; and any statute which distinguishes mailable from un- 
mailable matter merely by the nature of the intelligence 
offered for transmission is an unconstitutional enactment." 
"If the people," the counsel went on to state, "had conferred 
upon Congress authority to regulate public morals, the Statute 
before us would not be open to judicial criticism; but the 
people never conferred and Congress can not exercise any such 
right except where the General Government has territorial 
jurisdiction." In reply to these contentions the court said: 
"The power vested in Congress 'To establish poistoffioes and 
postroa^ds' has been practically construed since the foundation 
of the Government to authorize not merely the designation of 
the routes and the offices but the carriage of the mails and 
all measures necessary to secure the safe and speedy transit and 
the prompt delivery of its contents. * * * The power possessed 
by Congress embraces the regulation of the entire postal sys- 
tem of the country. The right to designate what shall be car- 
ried necessarily involves the right to determine what shall be 
excluded." After referring; to the controversv that arose in 



288 Lotteries, Frauds and Obscenity in the Mails. 

1836 in regard to the exclusion from the mails of publications 
containing inflammatory appeals, addressed to the passions of 
slaves, tending to stimulate them to insurrection and the opin- 
ion then held by a majority of the public men of the day that 
Congress had no power to refuse to carry such publications 
in the mails, the court went on to remark: "Great reliance 
is placed by the petitioner upon these views, coming as they 
did, in many instances, from men alike distinguished as jurists 
and statesmen. But it was evident they were founded upon 
the assumption that it was competent for Congress to prohibit 
the transportation of newspapers and pamphlets over postal 
routes in any other way than by mail ; and, of course it would 
follow, that if with such a prohibition the transportation in the 
mail could also be forbidden the circulation of the documents 
would be destroyed and a fatal blow given to the freedom of 
the press. But we do not think that Congress possesses the 
power to prevent the transportation, in other ways, as mer- 
chandise, of matter which it excludes from the mails. To give 
efficiency to its regulations and to prevent rival postal systems, 
it may perhaps prohibit the carriage by others, for hire, over 
postal routes, of articles which legitimately constitute mail 
matter in the sense in which those terms were used when the 
Constitution was adopted— consisting of letters and newspapers 
and pamphlets when not sent as merchandise — but further 
than this, its power of prohibition can not extend. Whilst 
regulations, excluding matter from the mails, can not be en- 
forced in a way which would require or permit an examination 
into letters or sealed packages subject to letter postage without 
warrant issued upon oath or affirmation in search for pro- 
hibited matter, they may be enforced upon competent evidence 
of their violation obtained in other ways; as from the parties 
receiving the letters or packages or from agents, depositing 
them in the postoffice or others cognizant of the facts. And, 
as to objectionable printed matter, which is open to examina- 
tion, the regulations may be enforced in a similar way by the 
imposition of penalties for their violation through the courts 
and, in some cases, by the direct action of the officers of the 



Lotteries, Frauds and Obscenity in the Mails. 289 

Postal service. In many instances these officers can act 
upon their own inspection and, from the nature of the case, 
must act without other proof; as when the postage is not pre- 
paid, or where there is an excess of weight over the amount 
prescribed or where the object is exposed and shows, unmis- 
takably, that it is prohibited as in the case of an obscene 
picture or print. The evidence, respecting them, is seen by 
every one and is, in its nature, conclusive. In excluding 
various articles from the mails the object of Congress has not 
been to interfere with the freedom of the press or with any 
other rights of the people, but to refuse its facilities for the 
distribution of matter deemed injurious to the public morals." 
Eeferring to the Act of Congress, excluding obscene matter 
from the mails, the court continues: "All that Congress meant 
by this Act was that the mail should not be used to transport 
such corrupting publications and articles. The same inhibi- 
tion has been extended to circulars concerning lotteries, insti- 
tutions which are supposed to have a demoralizing influence 
upon the people." 

The court did not answer the argument in regard to the 
exercise of the police power by the United States, in its rela- 
tion to the mail service, father than its incidental reference 
to the refusal of the government to furnish mail "facilities 
for the distribution of matter deemed injurious to the public 
morals" or "to transport such corrupting publications and arti- 
cles which are supposed to have a demoralizing influence upon 
the people." 

Sec. 253. The next time the constitutionality of these 
laws was drawn in question was in 1891-2, after the 
passage of the amendatory Act of September 19, 1890, in 
re Rapier and Dupree, 143 U. S. 110. Rapier was the pub- 
lisher of a newspaper and advertised the Louisiana Lottery 
in his paper, the Register of Mobile, Alabama, for which he 
was arrested upon an information against him. He sued 
out a writ of Habeas Corpus before the Supreme Court of 
the United States and asked to be discharged upon the ground 

19 



290 Lotteries, Frauds and Obscenity in the Mails. 

that the Act, under which he was arrested, was unconstitu- 
tional. Some of the ablest lawyers in the United States ap- 
peared for the petitioner, and urged, 1, "That Congress can 
not make any act a crime unless it is, in some manner, neces- 
sary or proper, in the execution of its own powers, to do so." 
2, "Congress in the exercise of its police power can not exclued 
matter concerning lotteries from the mails on the ground that 
the circulation of such matter would have an immoral or 
injurious tendency, because the power to declare lotteries 
crimes or to punish them as such or to obstruct or impede them 
because they are crimes is lodged exclusively with the State 
Government. 3. The Act abridges the freedom of the press; 
and that the law which excludes a newspaper because it con- 
tains a lottery advertisement undoubtedly censors the matter 
contained in the journal and it punishes its editor on account 
of the matter so published, if the deprivation of a common 
right be punishment. Discrimination in the use of the mails 
because of opinions expressed in its columns on a moral ques- 
tion smacks of proscription ; and when the newspaper is pub- 
lished in a state, which, by its laws, sanctions the opinions ex- 
pressed, such discrimination amounts to direct interference 
with the domestic policy of a State on a moral question which 
the State alone is competent to determine." But the court re- 
plied, in this language : "It is insisted that the express powers 
of Congress are limited in their exercise to the objects for 
which they were instituted and that in order to justify Con- 
gress in exercising any incidental or implied powers to carry 
into effect its express authority, it must appear that there is 
some relation between the means employed and the legitimate 
end. This is true, but while the legitimate end of the exercise 
of the power in question is to furnish mail facilities for the 
people of the United States, it is also true that mail facilities 
are not required to be furnished for every purpose. The States, 
before the Union was formed, could establish postoffices and 
postroads, and, in so doing, could bring into play the police 
power in the protection of their citizens from the use of the 
means so provided for the purposes supposed to exert a de- 



Lotteries, Frauds and Obscenity in the Mails. 291 

moralizing influence upon the people. When the power to es- 
tablish postoffices and postroads was surrendered to Congress , 
it was as a complete power and the grant carried with it the 
right to exercise all the powers which made that power effect- 
ive. It is not necessary that Congress should have the power 
to deal with crime or immorality within the states in order to 
maintain that it possesses the power to forbid the use of the 
mails in aid of the perpetration of crime or immorality. The 
argument that there is a distinction between mala prohibita 
and mala in se, and that Congress might forbid the use of the 
mails in promotion of such acts as are universally regarded as 
mala in se, including all such crimes as murder, arson, bur- 
glary, etc., and the offense of circulating obscene books 
and papers but can not do so in respect of other mat- 
ters, which it might regard as criminal or immoral, 
but which it has no power itself to prohibit, involves a 
concession which is fatal to the contention of petitioners, 
since it would be for Congress to determine what are 
within and what are without the rule; but we think there is 
no room for such a distinction here, and that it must be left 
to Congress in the exercise of a sound discretion to determine 
in what manner it will exercise the power it undoubtedly pos- 
sesses. We can not regard the right to operate a lottery as 
a fundamental right * * * nor are we able to see that 
Congress can be held in its enactment to have abridged the 
freedom of the press. The circulation of newspapers is not 
prohibited but the government declines to become an agent in 
the circulation of printed matter, which it regards as injurious 
to the people. The freedom of communication is not abridged 
within the intent and meaning of the Constitutional provision, 
unless Congress is absolutely destitute of any discretion as to 
what shall or shall not be carried in the mails, and compelled 
arbitrarily to assist in the dissemination of matter condemned 
by its judgment, through the government agencies, which it 
controls. That the power may be abused furnishes no ground 
for a denial of its existence, if government is to be maintained 
at all." 



292 Lotteries, Frauds and Obscenity in the Mails. 

In this case, as well as in Horner vs. U. S., 143 XL S. 207, 
and Horner vs. U. S., 147 U. S. 449, the principles laid down 
in the Jackson case were referred to and distinctly approved. 

Since these decisions, as remarked by Mr. Justice Cald- 
well in Harmon vs. U. S., 50 Fed. Rep. 921, "if authority can 
ever silence contention the constitutionality of this act of Con- 
gress is no longer open to discussion," at least so far as the ques- 
tions involved in the Jackson and Rapier cases are concerned. 

Sec. 253a. These cases have settled the following points : 

1. The power, possessed by Congress to establish postof- 
fices and postroads, embraces the regulation of the entire postal 
system of the country. The power to designate what shall be 
carried in the mails necessarily involves the right to deter- 
mine what shall be excluded. 

2. Congress has the power to exclude from the mails 
whatever it may deem injurious to the public morals and ob- 
scene matter and matter relating to lottery schemes is injurious 
to the public morals in a high degree. 

3. The Lottery Act does not deprive the citizen of his 
property or liberty without due process of law nor does it 
abridge the freedom of the press. 

Sec. 253b. The third and fourth questions above pro- 
pounded can be most satisfactorily examined and answered 
under one head and at the same time. 

Was the law prior to the enactment of section four of the 
Act of March 2, 1895, authorizing the Postmaster-General to 
issue an order forbidding the delivery of registered letters or 
the payment of money orders to a party found to be conduct- 
ing a lottery or fraudulent scheme through the mails consti- 
tutional, and is the fourth section of the above cited Act, au- 
thorizing the Postmaster-General to deprive a citizen not only 
of the facilities afforded by the Registry and Money Order 
Systems but also by the mails in general, constitutional ? 

This question was not involved in the Jackson and Rapier 
cases and it has never been answered by the Supreme Court 
of the United States but it has been before the inferior 
courts of the United States on several occasions. Against this 



Lotteries, Frauds and Obscenity in the Mails. 293 

Statute it is contended that it confers judicial power on the 
Postmaster-General, an officer possessing ministerial powers 
only, and that by the action of that officer the citizen would be 
deprived of his property and liberty without due process of 
law. 

These contentions open a wide field for the discussion of 
constitutional law. 

Sec. 254. The first proposition presented is whether the 
power conferred on the Postmaster-General by sections 3929 
and 4041, Bevised Statutes, and the fourth section of the Act 
of March 2, 1895, is in its nature judicial or simply ministerial. 
If the power be a judicial one, in the strict sense, it can not 
constitutionally be confided to a ministerial officer but must 
be conferred on the courts, if conferred at all. The Postmas- 
ter-General, being an executive officer, does not use judicial 
forms and can not exercise judicial power and yet there is no 
question but that he may exercise judicial functions. United 
States vs. The Commissioners, 5 Wallace, 565, and Wilkes vs. 
Dinsman, 7 Howard, 129. 

Judicial power is that power exercised by a court. It 
implies deliberation and discretion. But it is not every act that 
requires deliberation and discretion that can be denominated 
a judicial act, or the performance of which requires the exer- 
cise of judicial power, as contemplated in the general distribu- 
tion of powers under the Constitution. There are but few 
public officers, be they executive, judicial or legislative, whose 
duties do not impose the necessity of deliberation and the exer- 
cise of discretion. The same duty may be either legislative, 
executive, or judicial, accordingly as its performance is re- 
quired of one or the other department. 

The legislative branch frequently exercises judicial power 
in that it inflicts punishment. It also adjudicates private 
rights in allowing or rejecting claims for services performed 
or property taken or destroyed by the government. 

A sheriff of a county in acting under a writ of execution 
issued to him from a court in the performance of his duty 
must exercise judgment and discretion. He must determine 



294 Lotteries, Frauds and Obscenity in the Mails. 

how much property to levy on and oftentimes he is required 
to determine at his peril whether the defendant in the execu- 
tion owns the property or not and then he is called on to deter- 
mine whether the defendant is entitled to homestead and other 
exemptions under the law and if he determines that question 
in the affirmative to set off such exemptions. 

The executive branch of the government uses elements 
in executing its offices which when employed by a court are 
called judicial. 

In theory, the legislative, judicial, and executive powers 
of the government are ditributed respectively to the Congress, 
to the Courts and to the Executive. In practice each of these 
departments is compelled, in the effective exercise of its own 
peculiar powers, to avail itself of some of the elements which 
in theory belong to another department. When so used they 
operate as a means to the full exercise of power, but when used 
by the departments to which they properly belong, they crys- 
tallize into power itself. The element which, employed by a 
court, results in a judgment, when used by Congress proves i 
mere aid to the discharge of the legislative function. When 
called in aid by the executive department, it serves but to guide 
and render effective the executive power. The true test will 
always be the purpose for which the use is made, and its adapt- 
ability to accomplish that purpose — the purpose itself being 
legitimate. 

It is not far wrong to say that the distribution of powers 
is made by the Constitution only so far as it concerns the en- 
actment and ascertainment of rights and their enforcement, 
as they concern the individual citizen in his relations with his 
fellow citizens ; but that, in so far as the administration of the 
legislative, judicial and executive branches of the government 
is involved, eaclr department retains all power necessary to 
fully and efficiently perform its appropriate duties, so that 
when an official act is performed by one branch of the govern- 
ment, the inquiry should not be as to the nature of the element 
used, but as to its adaptability in aid of the end sought. If it 
be found fairly adapted to accomplish the end desired, it must 



Lotteries, Frauds and Obscenity in the Mails. 295 

be held constitutionally to belong to the department exercising 
it. The Constitution requiring the thing to be done it is con- 
stitutional to use the means proper to accomplish the result. 

A review of the authorities will show that the power con- 
ferred on the Postmaster-General by the Statutes in question 
is not judicial in its strict sense but involves the exercise of an 
administrative function, coupled with the exercise of discre- 
tion and judgment, partaking somewhat of the nature of judi- 
cial power. 

Sec. 255. In the case of Marberry vs. Madison, 1 Cranch 
137, President Adams had nominated and the Senate had con- 
firmed Marberry as a Justice of the Peace of the District of 
Columbia; and a commission in due form was signed by the 
President, appointing him such Justice and the seal of the 
United States was duly affixed thereto by the Secretary of 
State, but the commission had not been handed to Marberry 
when the offices of the government were transferred to the 
administration of President Jefferson. Mr. Madison, the new 
Secretary of State, refused to deliver the commission and a 
mandamus was applied for to the Supreme Court to compel 
him to do so. The court held that the appointment had been 
made and completed and that Marberry was entitled to his 
commission and that the delivery of it to him was a mere min- 
isterial act which involved no further official discretion on the 
part of the Secretary and could be enforced. But the court 
refused to issue the mandamus on the ground that it had no 
jurisdiction to issue it. 

Sec. 256. In Kendall vs. Stokes, 12 Peters, 524, it ap- 
peared that Stockton and Stokes, as contractors for carrying 
the mails, had claims against the government, and a contro- 
versy arose between them and the Postoffice Department in 
regard to them. Congress passed an act for their relief by 
which the Solicitor of the Treasury was authorized to adjust 
their claims and to make them such allowances as the evidence 
might show them equitably entitled to. The Solicitor of the 
Treasury accordingly investigated the claims and reported the 
amount he thought they were entitled to receive, but the Post- 



296 Lotteries, Frauds and Obscenity in the Mails. 

master -General, Kendall, refused to give them credit therefor 
as directed by law. This, the court held, he could be com- 
pelled to do by mandamus because it was a ministerial duty 
to be performed and not an official act, requiring the exercise 
of judgment or discretion. 

Sec. 257. In Decatur vs. Paulding, 14 Peters, 497, the 
facts were these: By the Act of March 3, 1837, the widow 
of any officer who had died in the naval service was entitled 
to a pension equal to half his monthly pay, from his death un- 
til her death or marriage. On the same day Congress passed 
a resolution granting a pension to Mrs. Decatur, widow of 
Stephen Decatur, for five years, commencing June 30, 1834, 
and the arrearages of the half pay of a port captain from 
Commodore Decatur's death to the 30 June, 1834. Mrs. 
Decatur applied and received her pension under the general 
law with a reservation of her rights under the resolution 
claiming the pension granted by that also. The Secretary of 
the Navy, acting under the advice of the Attorney-General, 
decided that she could not have both. Thereupon, she applied 
for a mandamus to compel the Secretary to comply with the 
resolution in her favor. Chief Justice Taney, delivering the 
opinion of the Court, said: "The duty required by the reso- 
lution was to be performed by him (the Secretary of the Navy) 
as the head of one of the executive departments of the gov- 
ernment, in the discharge of his official duties. In general, 
such duties, whether imposed by act of Congress or by reso- 
lution are not mere ministerial duties. The head of an Exec- 
utive Department, in the administration of the various and im- 
portant concerns of his office, is continually required to exer- 
cise judgment and discretion. He must exercise his judgment 
in expounding the laws and resolutions of Congress, under 
which he is required from time to time to act. If he doubts, he 
has a right to call on the Attorney-General to assist him with 
his counsel ; and it should be difficult to imagine why a legal 
adviser was provided by law for the heads of departments as 
well as for the President, unless their duties were regarded as 
executive in which judgment and discretion were to be exer- 



Lotteries, Frauds and Obscenity in the Mails. 297 

cised. If a suit should come before this court, which involved 
the construction of any of these laws, the court certainly would 
not be bound to adopt the construction given by the head of 
a department, and if they supposed his decision to be wrong, 
of course, so pronounce their judgment. But their judgment 
upon the construction of a law must be given in a case in which 
they have jurisdiction and in which it is their duty to interpret 
the Act of Congress in order to ascertain the rights of the par- 
ties in the cause before them. The court could not entertain 
an appeal from the decision of one of the secretaries, nor revise 
his judgment in any case where the law authorized him to ex- 
ercise judgment and discretion. Nor can it, by mandamus, 
act directly upon the officer and guide and control his judg- 
ment or discretion in the matters committed to his care in the 
ordinary discharge of his official duties. The case, before us, 
illustrates these principles and shows the difference between 
executive and ministerial duties." And it was accordingly 
held that the decision of the Secretary of the Navy in that case 
was entirely executive and official in its character. 

Sec. 258. In Martin vs. Mott, 12 Wheat. 19, it was held 
that the authority to decide whether the exigencies contem- 
plated in the Constitution and Acts of Congress, in which the 
President has authority to call forth the militia to execute the 
laws of the Union, to suppress insurrections and repel invas- 
ions, have arisen, is exclusively vested in the President and 
his decision thereon is conclusive on the court and all others. 
"That the power thus confided by Congress to the Presi- 
dent is of a very high and delicate nature is conceded. A free 
people are naturally jealous of the exercise of military power, 
but it is not a power which can be executed without a corre- 
ponding responsibility and to permit the officers and militia- 
men to refuse to obey the order of the President, upon the 
ground that they thought the exigencies for calling them out 
had not arisen, would seriously jeopardize public interests and 
safety." 

Sec. 259. In Brashear vs. Mason, 6 How. 91, which was 
a case for mandamus to compel the Secretary of the Navy to 



298 Lotteries, Frauds and Obscenity in the Mails. 

audit and pay the relator's claim for services in the Navy, the 
court dismissed the suit and remarked: "The Secretary is 
obliged to inquire into the condition of the fund and the claims 
already charged upon it, in order to ascertain if there is money 
enough to pay all the accruing demands, and, if not enough, 
how shall it be apportioned among the parties entitled to it. 
These are important duties calling for the exercise of judg- 
ment and discretion on the part of the officers,'' 

Sec. 260. In Western Star Lodge No. — vs. Schwinke, 
Postmaster, 15 Fed. Eep. 410, Judge McCreery held that an 
injunction would not be granted to restrain a postmaster from 
removing a postoffi.ee by direction of the Postmaster-General; 
that the postmaster was bound to obey the orders of the 
Postmaster-General. The relief sought was upon the ground 
that a removal of the office as proposed would be in violation 
of a lease made by the Postmaster-General. It was held that 
the power to remove a postoffice from one place to another is 
vested by law in the Postmaster-General and can be exer- 
cised by him at his discretion. 

Sec. 281. The treaty of 1819, by which Spain ceded 
Florida to the United States, contains the following stipula- 
tion : 

"The United States shall cause satisfaction to be made for . 
the injuries, if any, which by process of law, shall be estab- 
lished to have been suffered by the Spanish officers and individ- 
ual Spanish inhabitants by the late operations of the American 
Army in Florida," 

In 1823 Congress passed an act to carry into execution 
this article of the treaty. The first section of this law au- 
thorizes the judges of the superior courts established at Saint 
Augustine and Pensaeola, respectively, to receive and adjust 
all claims arising within their respective jurisdictions, agreea- 
bly to the provisions of the article of the treaty above men- 
tioned; and the second section provides — 

a That in all cases where the judges shall decide in favor of 
the claimants, the decisions with the evidence on which they 



Lotteries, Frauds and Obscenity in the Mails. 299 

are. founded shall be by the said judges reported to the Se- 
cretary of the Treasury, who, on being satisfied that the same 
is just and equitable within the provisions of the treaty, shall 
pay the amount thereof to the person or persons in whose favor 
the same is adjudged." 

The Supreme Court, in construing the power thus con- 
ferred, held as follows : 

"The law of 1823, therefore, and not the stipulations of 
the treaty, furnishes the rule for the proceeding of the territor- 
ial judges and determines their character. And it is manifest 
that this power to decide upon the validity of these claims is 
not conferred on them as a judicial function, to be exercised in 
the ordinary forms of a court of justice. For there is to be 
no suit; no parties in the legal acceptance of the term are to 
be made; no process to issue; and no one is authorized to ap- 
pear on behalf of the United States or to summon witnesses in 
the case. 

The proceeding is altogether ex parte, and all that the 
judge is required to do is to receive the claim when the party 
presents it, and to adjust it upon such evidence as he may have 
before him or be able himself to obtain. But neither the 
evidence nor his award are to be filed in the court in which he 
presides, nor recorded there; but he is required to transmit 
both the decision and the evidence upon which he decided to 
the Secretary of the Treasury, and the claim is to be paid if the 
Secretary thinks it just and equitable, but not otherwise. It is 
to be a debt from the United States upon the decision of the 
Secretary, but not upon that of the judge. 

It is too evident for argument upon the subject that such 
a tribunal is not a judicial one, and that the Act of Congress 
did not intend to make it one. (United States vs. Ferreira, t 
13 Howard, 46)." 

Sec. 262. Among the leading cases on the subject of 
what a judicial proceeding is and what is due process of law is 
Murray and Kayser vs. Hoboken Land and Improvement Co., 
18 How. 272. That was an action of ejectment in which both 
parties claimed title under Samuel Swortwout — the plaintiffs, 



300 Lottefies, Frauds and Obscenity in the Mails. 

under a levy of an execution on April, 10, 1839, and the 
defendant under a sale made by the United States Marshal on 
the 1st day of June 1839, by virtue of a distress warrant issued 
by the Solicitor of the Treasury in pursuance of the Act of 
Congress of May 15, 1820, the date of the levy under this 
warrant antedating the judgment under which plaintiffs 7 title 
was made. The above cited Act gave a lien to the United 
States on the lands of the delinquent and defaulting Collector 
of the Customs from the date of the levy of the distress warrant 
authorized by the same Act. Swortwout was Collector of the 
Customs for the port of New York and his account was audited 
by the First Auditor and certified by the Comptroller of the 
Treasury; and for the balance thus found, amounting to 
$1,374,119.65, the warrant in question was issued by the 
Solicitor of the Treasury. It would seem that Swortwout had 
no notice of any of these proceedings and was not heard. 

The plaintiff contended that the Act of Congress, au- 
thorizing the issuance of a distress warrant without notice to 
the defaulting officer or giving him a hearing and a sale of his 
lands thereunder, was unconstitutional and void, because, 1, 
the proceeding was, in its nature, judicial, and hence, could not 
be confided to an executive officer and 2, that the warrant was 
not "due process of law." Mr. Justice Curtis delivered the 
unanimous opinion of the court. The court considered the 
two propositions raised, together. It was held that "due 
process of law" had the same meaning as the "law of the land." 
That the distress warrant was legal process was not denied, 
for it was issued in conformity to the Act of Congress. 'Was it 
"due process of law" within the meaning of these terms as 
used in the Constitution ? was the question propounded and 
answered by the court ? The court, after an historical review 
of the practice in England and the Colonies prior to the 
adoption of the Constitution, on this subject, goes on to show 
that there is and always has been a radical difference between 
the methods of ascertaining the existence and amount of 
debts, due by the receivers of the revenue and compelling their 
payment and that these methods have varied widely from the 



Lotteries, Frauds and Obscenity in the Mails. 301 

usual course of the common law on other subjects ; "and that, 
as respects such debts due from such officers, the law of the 
land authorized the employment of auditors and an inquisi- 
tion without notice' ' and a species of execution against the 
body, lands and goods of the debtor to enforce payment of the 
amount found due. The court, in the course of the opinion, 
says : "That the auditing of the accounts of a receiver of public 
moneys may be, in an enlarged sense, a judicial act, must be 
admitted. So are all those administrative duties, the per- 
formance of which involves an inquiry into the existence 
of facts and the application to them of the rules of 
law. In this sense, the act of the President in calling 
out the militia, under the Act of 1795 (12 Wheat. 19), 
or of a commissioner, who makes a certificate for the 
extradition of a criminal under a treaty, is judicial. But 
it is not sufficient to bring such matters under the judicial 
power, that they involve the exercise of judgment upon law 
and fact. 17. S. vs. Ferriera, 13 How. 40. It is necessary 
to go further and show not only that the adjustment of the 
balances due from accounting officers may be, but from their 
nature must be controversies to which the United States is a 
party within the meaning of the second section of the third 
Article of the Constitution. We do not doubt the power of 
Congress to provide by law that such a question shall form the 
subject-matter of a suit, in which the judicial power can be 
exerted. The Act of 1820 makes such a provision for review- 
ing the decision of the accounting officers of the Treasury. 
But, until reviewed, it is final and binding; and the question 
is, whether its subject is necessarily and without regard to the 
consent of Congress a judicial controversy. And we are of 
opinion that it is not. * * * The power to collect and 
disburse revenue and to make all laws, that shall be necessary 
and proper for carrying that power into effect, includes all 
known and appropriate means of effectually collecting and 
disbursing that revenue. * * * Its purpose is to raise 
money and use it in payment of the debts of the government; 
and, whoever may have possession of the public money, until 



302 Lotteries, Frauds and Obscenity in the Mails. 

it is actually disbursed, the power to use those known and 
appropriate means continues. * * * It may be added that, prob- 
ably, there are few governments which do or can y ermit claims 
for public taxes * * * to become subjects of judicial 
controversy according to the course of the law of the land. 
Imperative necessity has forced a distinction between such 
claims and all others, which has sometimes been carried out 
by summary methods of proceeding. * ■ * * Though gen- 
erally, both public and private wrongs are redressed through 
judicial action, there are more summary extra judicial re- 
medies for both. An instance of extra-judicial redress of 
private wrong is the recapture of goods by their lawful owner ; 
of a private wrong by a private person is the abatement of a 
public nuisance; and the recovery of public dues, by a sum- 
mary process of distress, issued by some public officer author- 
ized by law is an instance of redress of a particular kind of 
public wrong by the act of the public through its authorized 
agents. There is, however, an important distinction between 
these. Though a private person may retake his property or 
abate a nuisance, he is directly responsible for his acts to the 
proper judicial tribunals. His authority to do these acts de- 
pends not merely on the law, but upon the existence of such 
facts as are in point of law sufficient to constitute that au- 
thority; and he may be required by an action at law to prove 
those facts; but a public agent, whose acts, pursuant to the 
command of the legal precept, can justify his act by the pro- 
duction of such precept. He can not be made responsible in a 
judicial tribunal for obeying the lawful command of the 
government; and the government itself, which gave the com- 
mand, can not be sued without his consent." The court goes 
on to say that "there are matters involving public rights which 
may be presented in such form that the court is capable of 
acting on them and which are susceptible of judicial determina- 
tion but which Congress may or may not bring within judicial 
cognizance of the courts of the United States as it may deem 
proper. Equitable claims to land, by the inhabitants of ceded 
territories, form a striking instance of such a class of cases ; 



Lotteries, Frauds and Obscenity in the Mails. 303 

and as it depends on the will of Congress whether a remedy 
in the courts shall be allowed at all in such cases they may 
regulate it and prescribe such rules as they may think just and 
needful. Thus it has been repeatedly decided, in this class of 
cases, that upon their trial, the acts of executive officers, done 
under the authority of Congress, were conclusive, either upon 
the particular facts involved, or upon the whole title. Faley 
vs. Harrison, 15 How. 433; Burgess vs. Gray, 16 How. 48. 

It is true, also, that even in a suit between private persons 
to try a question of private right, the action of the executive 
power, upon a matter committed to its determination on the 
Constitution and Laws, is conclusive. Luther vs. Borden, 7 
How. 1 ; Doe vs. Borden, 15 How. 635." 

Applying the principles thus laid down, the court held 
that, the action of the executive power in issuing the warrant 
was conclusive evidence of the facts recited in it and of the 
authority to make the levy. 

Sec. 263. In Luther vs. Borden, cited in the above case, 
the court, after holding that the President has the power, 
under the Constitution, to determine what body of men con- 
stitutes the Legislature of a State and who is the Governor of a 
State, when a dispute arises requiring such determination, 
continues: "It is said, this power in the President is danger- 
ous to liberty and may be abused. All power may be 
abused, if placed in unworthy hands. * * * When citizens 
of the same State are in arms against each other and the con- 
stituted authority are unable to execute the laws, the interposi- 
tion of the United States must be prompt or it is of little value. 
The ordinary course of proceedings in Courts of Justice would 
be utterly unfit for the crisis. And the elevated office of 
the President * * * and the high responsibility he could not 
fail to feel when acting in a case of so much moment, appear 
to furnish such strong safeguards against a willful abuse of 
power as human prudence and foresight could well provide." 

Sec. 264. In Doe vs. Borden, another case cited by the 
court in Murray vs. Hoboken L. and I. Co., the court held 
that a previous land grant by the sovereign, under which plain- 



304 Lotteries, Frauds and Obscenity in the Mails. 

tiff claimed, was annulled by the treaty entered into between 
this country and the country whose sovereign made the grant ; 
and that it was for the President and Senate to determine 
whether the sovereign (in that case the King of Spain) was 
authorized to annul a grant previously made by him. They 
having recognized that power by ratifying the treaty, the 
Courts of Justice were bound to so regard and treat it. The 
claim of the plaintiff in the case that the courts could inquire 
whether the President and Senate were not mistaken as to the 
authority of the Spanish Monarch or whether he knowingly 
sanctioned an act of injustice committed by him upon an in- 
dividual in violation of the laws of Spain, was held to have 
no support in the Constitution of the United States nor in the 
jurisprudence of any country where the judicial and political 
powers are separated and placed in different hands, and the 
court refused to grant relief, though the contest was between 
private parties on both sides. 

Sec. 265. An officer, to whom public duties are confided 
by law, is not subject to the control of the courts in the exer- 
cise of the judgment and discretion which the law reposes in 
him as a part of his official functins. Gaines vs. Thompson, 
7 Wall. 237; Statesby vs. U. S., 146 U. S. 196; Mississippi 
vs. Johnson, 4 Wall. 475 ; City of New Orleans vs. Paine, 147 
U. S. 261; Noble vs. Union River Logging Wj Co., 147 U. S. 
165. 

In the City of New Orleans vs. Paine, supra, the court, 
in referring to Gaines vs. Thompson, said: "In delivering 
the opinion of the court, Mr. Justice Miller stated the general 
doctrine to be that an officer, to whom public duties are con- 
fided by law, is not subject to the control of the courts in the 
exercise of the judgment and discretion which the law reposes 
in him as a part of his official functions. Certain powers and 
duties are confided to those officers, and to them alone, and 
however the courts may, in ascertaining rights of parties in 
suits properly before them, pass upon the legality of their acts 
after the matter has once passed beyond their control, there 
exists no power in the courts by any of its processes to act 



Lotteries, Frauds and Obscenity in the Mails. 305 

upon the officer so as to interfere with the exercise of that 
judgment while the matter is properly before him for action." 

Sec. 266. In Philadelphia and Trenton K'y Co. vs. 
Stimpson, 14 Pet, 448, the court said: "Now the objection is 
that the present patent does not contain any recitals that the 
pre-requisites thus stated in the act have been complied with, 
viz., that the error in the former patent has arisen by inadver- 
tency, accident or mistake and without fraudulent or de- 
ceptive intention, and without such recitals, as in the case of a 
special authority, the patent is a mere nullity and inoperative. 
* * * "\Yhere, as in the present case, an act is to be done 
or patent granted upon evidence and proofs to be laid before 
a public officer, upon which he is to decide the fact that he has 
done the act or granted the patent, is prima facie evidence 
that the proofs have been regularly made and were satisfactory. 
Xo other tribunal is at liberty to re-examine or controvert the 
sufficiency of such proofs, if laid before him, when the law 
has made such officer the proper judge of their sufficiency and 
competency." 

Sec. 267. In Kendall vs. Stokes, 3 How. 86, which was 
a ease brought against Kendall for damages for official acts 
done by him as Postmaster-General, the Supreme Court, 
though it did not pass on the question directly, conceded in the 
argument, that such an action would lie and the case w^as dis- 
posed of on other grounds. The court, however, used this 
language : "But a public officer is not liable to an action if he 
falls into error in a case where the act to be done is not merely 
a ministerial one but is one in relation to which it is his duty 
to exercise judgment and discretion; even although an indi- 
vidual may suffer by his mistake. This was fully recognized 
in Gridley vs. Lord Palmerston (J. B. Moore, 91; B. and B. 
275." The court cited also 9 Clark and Pinley 251. 

The court seems to have fallen into an inconsistency here, 
for in Kendall vs. Stokes, 12 Peters, 524, where the same facts 
were before the court, it was held that the act Kendall, as 
Postmaster-General, was required to perf om was not a judicial 

20 



306 Lotteries, Frauds and Obscenity in the Mails. 

but a ministerial one and that, therefore, mandamus would 
lie against him to compel him to perform it. 

Sec, 268. In U. S. Ex. Eel. Aaron Goodrich vs. 
Guthrie, 17 How. 284, which was an application for man- 
damus to compel Guthrie, as Secretary of the Treasury, 
to pay Goodrich his salary as judge of the Territory of Min- 
nesota, the court, speaking through Mr. Justice Daniel, denied 
the writ and, after stating that the question presented was 
whether the courts of the United States possessed the power to 
compel the withdrawal of money from the treasury to satisfy 
disputed claims against the government, said: "This is the 
question the very question presented for our determination; 
and its simple statement would seem to carry with it the most 
startling considerations — nay, its unavoidable negation — un- 
less this should be presented by some positive and controlling 
command; for it would occur a priori to every mind that a 
treasury not fenced round and shielded by fixed and established 
modes and rules of administration, but which could be sub- 
jected to any number or description of demands, asserted and 
sustained through the undefined and undefinable discretion of 
the courts, would constitute a feeble and inadequate provision 
for the great and inevitable necessities of the nation. The 
government under such a regime, or rather, under such an 
absence of all rule, would, if practicable at all, be administered 
not by the great departments ordained by the Constitution 
and laws and guided by the modes therein prescribed, but by 
the uncertain and perhaps contradictory action of the courts in 
the enforcement of their views of private interests. * * * 
Thus it has been ruled that the only acts to which the power 
of the courts by mandamus extends are such as are purely 
ministerial and with regard to which nothing like judgment 
and discretion dn the performance of his duties is left to the 
officer ; but wherever the right of judgment or discretion 
exists in him, it is he and not the courts who can regulate its 
exercise. These are the doctrines expressly ruled by this court 
in the case of Kendall vs. Stokes, 12 Peters, 524; in that of 
Decatur vs. Paulding, 14 Peters, 497 and in the more recent 



Lotteries, Frauds and Obscenity in the Mails. 307 

case of Brashear vs. Mason, 6 How. 92; principles regarded as 
fundamental and essential and apart from which the adminis- 
tration of the government would be impracticable." 

Sec. 269. In Hetton vs. Merritt, 110 U. S. 97, the Su- 
preme Court of the United States held that "the valuation ot 
merchandise, made by the custom officers under the Statutes 
of the United States for the purpose of levying duties thereon, 
is, in the absence of fraud on the part of the officers, conclusive 
on the importer and such valuation is not reviewable in an ac- 
tion at law, brought by the importer to recover back duties paid 
under protest and that a denial of the right to bring an action 
at law to recover duties paid under an alleged excessive valua- 
tion of dutiable merchandise is not depriving the importer of 
his property without due process of law." The court further re- 
marked: "Thus court, in referring to the general policy of 
the laws for the collection of the revenues, said, in Bartlett vs. 
Kane, 16 How. 263: 'The interposition of the courts, in the 
appraisement of importations, would involve the collection 
of the revenue in inextricable confusion.' And referring to 
section 3 of the Act of March 3, 1851 (9 Stat. L. 630), which 
is reproduced in section 2930, Rev. Stat., this court declared, 
in Belcher vs. Linn, 24 How. 508, that, 'in the absence of 
fraud, the decision of the custom officers is final and conclusive, 
and their appraisement in contemplation of law becomes, for 
the purpose of calculating and assessing the" duties due to the 
United States, the true dutiable value of the importation. * * * 
Plaintiffs in error contend further that a denial of the right 
to bring an action at law to recover duties paid under an al- 
leged excessive valuation of dutiable merchandise is depriving 
the importer of his property without due process of law and is 
therefore forbidden by the Constitution of the United States. 
The cases of Murray's Lessees vs. Hoboken L. and I. Co., 18 
How. 272; and Springer vs. U. S., 102 U. S. 586, are con- 
clusive on this point against the plaintiffs in error." The 
doctrine here announced was affirmed in Passavant and Co. 
vs. U. S., 148 U. S. 212, Auget vs.Hedden, 155 U. S. 231; 
and Aufmordt vs. Hedden, 157 U. S. 310. 



308 Lotteries, Frauds and Obscenity in the Mails. 

Sec. 270. Sections 4026 and 3990, R. 8., IT. S., au- 
thorize the Postmaster-General to empower special agents to 
make searches for mailable matter transported in violation 
of law, not being in a dwelling house, and authorize the agent, 
collector or other Custom Officer or U. S. Marshal or his 
deputy to seize all letters and bags, packets or parcels, contain- 
ing letters which are being carried contrary to law and detain 
the same for two months after the final determination of all 
suits that may be brought against the person carrying them. 
These sections were involved in the case of Blockham vs. 
Gresham and others, 16 Fed. Rep. 609. The court refused 
to pass on their constitutionality, but remarked that "Provis- 
ions for searches and seizures to enforce revenue laws have 
long been familiar to the legislation of Congress; and, as Judge 
Cooley remarks (Cons. Lim. 304, note), 'the federal decisions 
go very far to establish the doctrine that in matters of revenue 
the regulations Congress sees fit to establish, however un- 
reasonable they may seem, must prevail.' " 

Sec. 271. C. J. Taney, in Commissioner of Patents vs. 
Whitely, 4 Wall, 522, said: "The interference of the courts 
with the performance of the ordinary duties of the executive 
departments of the government would be productive of noth- 
ing but mischief and we are quite satisfied that such a power 
was never intended to be given them." 

Sec. 272. The Comptroller of the Currency may be 
clothed with power to determine when a receiver of a INTational 
Bank should be appointed and the receiver may adjust claims 
against the bank and his decisions on these questions are 
conclusive against the stockholders, who have no notice and 
are not heard. Kennedy vs. Gibson, 8 "Wall. 498; Casey vs. 
Galli, 94 IT. S. 674; U. S. vs. Knox, 102 IT. S. 423; and 
Bushnell vs. Lelalid, 17 Sup. Ct. Rep. 209. 

Sec. 273. The Postmaster-General has power to dis- 
continue a postoffice, when authorized to do so by Congress, 
notwithstanding the discontinuance has the effect to remove 
the postmaster, who has been appointed and commissioned by 
the President, from office. Ware vs. IT. S., 4 Wall. 617. 



Lotteries, Frauds and Obscenity in the Mails. 309 

The Postmaster-General has a discretion to prescribe the 
time of departure and arrival of the mails. Neil vs. Ohio, 
3 How. 720. 

Sec. 274. The head of an Executive Department can 
not be held liable to a civil suit for damages on account of offi- 
cial communications made by him pursuant to an Act of Con- 
gress and in respect of matters within his authority by reason 
of any personal or even malicious motive that might be .alleged 
to have prompted him. In exercising the functions of his 
office, he, keeping within the limits of his authority, should not 
be under an apprehension that the motives that control his 
official conduct may at any time become the subject of inquiry 
in a civil suit for damages. It would seriously cripple the 
proper and effective administration of public affairs, as in- 
trusted to the executive branch of the government, if he were 
subjected to any such restraint. Spalding vs. Vilas, 161 U. S. 
483. 

But if he acts outside of the law or fails to comply with 
the law a postmaster is liable for a wrong done a citizen though 
he acted in good faith. This point was ruled in Teal vs. Felton, 
12 How. 284, where it appeared the Postmaster-General had 
issued instructions to all postmasters to be cautious in regard 
to writings,on the wrappers, margins or other portions of news- 
papers, pamphlets and magazines sent by mail and to exclude 
from the mails any wrapper, etc., having a memorandum of 
any kind, either written or stamped or by marks or signs made 
in any way to give information. Teal was postmaster at 
Syracuse, New York. A newspaper, on the wrapper of which 
was an "initial" of a single letter, distinct from the address, 
intended for Felton, reached that city and Teal, under the 
above instructions of the Postmaster-General, refused to 
deliver it unless letter postage was paid thereon. Felton sued 
him in a State Court and the case finally reached the Supreme 
Court of the United States, which held: 

1. That a single letter or initial is not a writing or mem- 
orandum within the meaning of section 30 of the Act of 1825 
(4 State L. 105-111). 



310 Lotteries, Frauds and Obscenity in the Mails. 

2. That the instructions of the Postmaster-General were 
not authorized by the law so far as the "initial" in this case 
was concerned. 

3. This was not a case calling for the exercise of dis- 
cretion or judgment within the rule exempting an officer from 
liability for a wrong done unintentionally. 

4. A State Court has Jurisdiction of such case. 

The court speaking of the decision in Kendall vs. Stokes, 
3 How. 97, said: 

"It is the law which gives the justification and nothing 
less than the law can give irresponsibility to the officer al- 
though he may be acting in good faith under the instructions 
of his superior of the Department to which he belongs. 

Here the instructions exceed the law, as marks and signs 
of themselves, without some knowledge of their meaning and 
the intention in the use of them, are, as we have said, neither, 
memoranda nor writings." 

Sec. 275. Carrick, being the head of the family, made a 
settlement in person on Arsenal Island in the Mississippi river 
near St. Louis, erected a dwelling house thereon and inhabited 
it. He requested the Secretary of the Interior to have the 
Island surveyed and brought into the market so that he might 
avail himself of the rights he had acquired as such settler, 
under the laws of the United States. The Secretary rejected 
the application. He then applied to the courts for a man- 
damus, etc. The Supreme Court of the United States in 
U. S. vs. Lamar, 116 U. S. 423, refused the mandamus on 
the ground that the question submitted to the Secretary of the 
Interior required the exercise of judgment and discretion, and 
consequently his decision was final and could not be reviewed 
by the courts. 

Sec. 276. In United States ex rel Dunlap vs. Black, 128 
U. S. 40, it appeared that the Commissioner of Pensions, 
J. C. Black, had found that the relator, Dunlap, had been 
totally disabled by wounds and injuries received in the mili- 
tary service of the United States, but refused to allow him the 
pension, given by law, for total disability upon the ground 



Lotteries, Frauds and Obscenity in the Mails. 311 

"that he was not on the 16th of June, 1880 (the date of the 
Act), receiving a pension at the rate of $50 per month, nor was 
he entitled to receive a pension at the rate of $50 per month at 
that date for the reason that while the degree of helplessness 
was that contemplated by the law the claimant himself had not 
made application to be rated in pursuance of the Act of June 
18, 1874, bat, on the contrary, had asked to be rated and had 
been rated at $36 per month under the Act of February 28, 
1877." Dunlap applied for a writ of mandamus to compel the 
Commissioner to rate him at $72 per month, the amount au- 
thorized by law for total disability and insisted, as the Com- 
missioner had expressly found, that he was totally disabled by 
wounds and injuries received in the army, the question was one 
purely of law involving the construction of the various acts of 
Congress on the subject of pensions and that it did not lie 
in the discretionary power of the Commissioner of Pensions 
to deny or in any way abridge his rights in regard to a pension. 
The Supreme Court, through Mr. Justice Bradley, after quot- 
ing with approval the language of Chief Justice Taney in the 
case of Decatur vs. Paulding, as above given, said: "The 
court will not interfere by mandamus with the executive offi- 
cers of the government in the exercise of their ordinary official 
duties, even where these duties require an interpretation of 
the law, the court having no appellate power for that purpose ; 
but when they refuse to act in a case at all or when, by special 
Statute, is imposed upon them a service which they are bound 
to perform, without further question, then, if they refuse, a 
mandamus may be issued to compel them. * * * The 
Commissioner of Pensions did not refuse to act or decide. 
He adopted an interpretation of the law adverse to the relator 
and his decision was confirmed by the Secretary of the In- 
terior. Whether if the law were properly before us for con- 
sideration we should be of the same opinion or of a different 
opinion is of no consequence in the decision of this case. We 
have no appellate power over the Commissioner and no right 
to review his decision. That decision and his action taken 
thereon were made and done in the exercise of his official 



312 Lotteries, Frauds and Obscenity in the Mails. 

functions. They were by no means merely ministerial acts." 
The writ was denied. 

"It is settled that more can not be required of a public 
officer by mandamus than the law has made it his duty to do. 
The object of the writ is to enforce the performance of an 
existing duty not to create a new one.' 7 Ex Parte Bowland, 
104 U. S. 604. 

Sec. 277. In Dent vs. State of West Virginia, 129 U. S. 
114, Dent was indicted for practicing medicine without obtain- 
ing a certificate from the State Board of Health under the 
Statutes of that State. He had presented his diploma to such 
Board of Health, as required by the Statutes, but the Board 
had rejected it as insufficient and he was a practicing physician 
at the time of the passage of this Statute and had been since 
1876 and he insisted that the Statute deprived him of his 
rights with due process of law. The court, holding this 
contention untenable, said: "It is sufficient, for the purposes 
of this case, to say that legislation is not open to the charge of 
depriving one of his rights without due process of law if it be 
general in its operation upon the subjects to which it relates 
and is enforceable in the usual modes established in the ad- 
ministration of government with respect to kindred matters, 
that is, by due process or proceedings adapted to the nature of 
the case. The great purpose of the requirement is to exclude 
everything that is arbitrary and capricious in legislation, affect- 
ing the rights of the citizen. * * * There is nothing of 
an arbitrary character in the provisions of the Statute in ques- 
tion; it applies to all physicians, except those who may be 
called for a special case from another State; it imposes no 
conditions which can not be readily met; and it is made en- 
forcible in the mode usually adopted in kindred matters, that 
is,. by regular proceedings adapted to the case." 

In Choe Chan Ping vs. U. S., 130 IT. S. 581, it was held 
that while the government could not deprive an alien 
of property, acquired by him under treaty with his 
government or under a law of our country, yet he could be 
deprived of the right to remain here by an Act of Congress 



Lotteries, Frauds and Obscenity in the Mails. 313 

even in antagonism to a treaty. The court says: "Between 
property rights not affected by the termination or abrogation 
of a treaty and expectation of benefits from the continuance 
of existing legislation there is a wide difference, as between 
realization and hopes. " 

Sec. 278. In IT. S. vs. Windom, 137 U. S. 636, it was 
held that a writ of mandamus will not issue to compel the 
Secretary of the Treasury to deliver a treasury draft for labor 
and material in constructing and repairing government build- 
ings, where the draft was prepared for delivery upon condition 
that a part thereof should be applied to the claims of laborers 
and materialmen and the petitioner refuses to perform that 
condition, nor will the writ issue to compel the Secretary to 
pay a draft where his return raises disputed questions of fact 
and. law which ought to be tried in the proceedings to obtain 
the writ. The action of Secretary Windom, in the case, it was 
held, required the exercise of judgment and discretion and 
was, therefore, not merely ministerial. 

Sec. 279. In Aufmordt vs. Hedden, 137 U. S. 310, it 
was distinctly held that a statute, making the appraisement of 
the dutiable value of imported goods by appraisers, appointed 
for that purpose, final, was not unconstitutional. The court 
there said: "The proceedings for appraisal must necessarily 
be, to some extent, of a summary character. In Cheatham 
vs. U. S., 85 U. S. 88, it was said by the court, speaking by Mr. 
Justice Miller: 'All governments, in all times, have found it 
necessary Co adopt stringent measures for the collection of 
taxes and to be rigid in the enforcement of them. These 
measures, are not judicial nor does the government resort, ex- 
cept in extraordinary cases, to the courts for that purpose. 
The revenue measures of every civilized government consti- 
tute a system which provides for its enforcement by officers 
commissioned for that purpose.' * * * It was said also, 
in that case (p. 89) 'that the government has the right to 
prescribe the conditions, on which it will subject itself to the 
judgment of the courts in the collection of its revenues.' One 
of those conditions is, and always has been, that the determina- 



314 Lotteries, Frauds and Obscenity in the Mails. 

tion of appraisers, as to the dutiable value of goods, shall be 
conclusive and not re-examinable in a suit at law, provided the 
appraisers are selected in conformity with the Statute, and, 
in appraising, act within the scope of the powers conferred 
upon them." 

Sec. 280. In Ekin vs. U. S., 142 U. S. 651, the court 
said: "And Congress may, if it sees fit, as in the Statute in 
question in United States vs. Jung Ah Lung, just cited (124 
U. S. 621), authorize the courts to investigate and ascertain the 
facts on which the right to land depends. But, on the other 
hand, the final determination of those facts may be intrusted 
by Congress to executive officers; and in such case, as in all 
others, in which a Statute gives a discretionary power to an 
officer to be exercised by him upon his own opinion of certain 
facts, he is made the sole and exclusive judge of the existence 
of those facts, and no other tribunal, unless expressly au- 
thorized by law to do so, is at liberty to re-examine or contro- 
vert the sufficiency of the evidence on which he acted. Martin 
vs. Mott, 12 Wheat. 19; Philadelphia and T. E. Co. vs. Stimp- 
son, 14 Peters, 448; Benson vs. McMahan, 127 U. S. 457; 
Otriga Y. Cortes vs. Jacobus, 136 U. S. 330. 

It is not within the province of the Judiciary to order 
that foreigners, who have never been naturalized nor acquired 
any domicile or residence in the United States nor 
even been admitted into the country pursuant to law, 
shall be permitted to enter in opposition to the constitutional 
and lawful measures of the legislative and executive branches 
of the National Government. As to such persons, the deci- 
sions of the executive or administrative officers acting within 
the powers expressly conferred by Congress, are due process 
of law. Murray vs. Hoboken Land and Im. Co., 18 How. 
272; Hetton vs. Merritt, 110 U. S. 97. 

It was accordingly held that the decision of an inspector 
of immigration, in conformity with the Act of March 3, 1891, 
is final and conclusive against an alien's right to land in the 
United States and can not be impeached or reviewed in the 
Courts." 



Lotteries, Frauds and Obscenity in the Mails. 315 

And it was held in Yick Wo vs. Hopkins, 118 U. S. 35 6, 
that the provisions of the Fourteenth Amendment to the Con- 
stitution of the United States are universal in their application 
to all persons in the territorial jurisdiction of the United States 
without regard to any difference of race, color or nationality. 

Sec. 281. In Fong Yue Ting vs. U. S., 149 U. S. 698, 
it was held that "the provision in the act of May 5, 1892, that 
any Chinese laborer found within the United States who had 
neglected, failed or refused to apply for a certificate of resi- 
dence within one year after passage of the act, or who, after 
one year, shall be found in the United States, without such cer- 
tificate, shall be adjudged and deemed to be unlawfully within 
the United States, unless he shall establish clearly to the sat- 
isfaction of the judge by at least one credible white witness, 
that he was a resident of the United States at the time of the 
passage of the act," is within the acknowledged province of 
every legislature to prescribe the evidence which shall be re- 
ceived and the effect of that evidence in the Courts of its own 
government. After citing Ogden vs. Saunders, 12 Wheat. 
213; Pillow vs. Roberts, 13 How. 472; 125 Baskets of Cham- 
pagne vs. U. S., 3 Wall, 14; Ex parte Fisk, 113 U. S. 713; 
Holmes vs. Hunt, 122 Mass. 505, in support of the above prop- 
osition, the Court continues: "The competency of all wit- 
nesses, without regard to their color, to testify in the Courts of 
the United States, rests on Acts of Congress, which Congress 
may, at its discretion, modify or repeal. Rev. Stat. ss. 858, 
1977. 

The reason for requiring a Chinese alien to prove the fact 
of his residence here at the time of the passage of the Act, 'by 
3t least one credible white witness/ may have been the expe- 
rience of Congress, as mentioned by Mr. Justice Field, in Choe 
Ping vs. U. S., 'that the enforcement of former acts, under 
which the testimony of Chinese persons was admitted, to prove 
similar facts, was attended with great embarrassment from the 
suspicious nature, in many instances, of the testimony offered 
to establish the residence of parties, arising from the loose 



316 Lotteries, Frauds and Obscenity in the Mails. 

notions entertained by the witnesses of the obligation of an 
oath. " 

In this same case it was held that the proceeding, before 
a United States Judge, as provided for in section 6 of the Act 
of 1892, before whom the burden was on the Chinese laborer 
to prove his right to remain in this country, by at least one 
credible white witness or else an order for his deportation could 
be made by the judge, was in no sense a trial for crime or 
offense, that the order for deportation was not a punishment 
for crime, nor a banishment in the sense that word is often ap- 
plied to the expulsion of a citizen from his own country by way 
of punishment, and, in case of deportation of the laborer, he 
was not deprived of life, liberty or property without due pro- 
cess of law and that the provisions of the Constitution, secur- 
ing the right of trial by jury and prohibiting unreasonable 
searches and seizures and cruel and unusual punishment have 
no application. On this point, the Court concludes as follows : 
"The question whether and upon what conditions these per- 
sons shall be permitted to remain within the United States be- 
ing one to be determined by the political departments of the 
government, the judicial department can not properly express 
an opinion upon the wisdom, the policy or the justice of the 
measures enacted by Congress in the exercise of the powers 
confided to it by the Constitution over this subject," In this 
case, it appeared that three Chinamen were arrested by the 
United States Marshal without warrant or other. process. Two 
of them were taken before the United States Judge and, in one 
case, an order of deportation was made without a hearing or 
trial and, in the other case, the party showed all the facts, nec- 
essary to entitle him to remain here, but not by a credible white 
witness. 

Sec. 282. In Passovant & Co. vs. U. S., 148 U. S. 214, 
the question being again presented whether the Courts could 
review the decision of the Board of General Appraisers under 
the Act of June 10, 1890, as to the dutiable value of imported 
merchandise, the Court said : "It was certainly competent for 
Congress to create this Board of General Appraisers, called 



Lotteries, Frauds and Obscenity in the Mails. 317 

'legislative referees' in an early case (Kankin vs. Hoyt, 4 How. 
335), and not only invest them with authority to examine and 
decide upon the valuation of imported goods when that ques- 
tion was properly presented to them but to declare their de- 
cision shall be final as to the dutiable value of such merchan- 
dise against all parties interested therein. *. ■ .'* * In the 
tariff legislation of the government Congress has generally 
adopted means and methods for a speedy and equitable adjust- 
ment of the question as to the market value of imported arti- 
cles without allowing an appeal to the Courts to review the 
decision reached. If dissatisfied importers, after exhausting 
the remedies provided by the statute to ascertain and deter- 
mine the fair dutiable value of imported merchandise, could 
apply to the Courts to have a review of that subject the 
prompt and regular collection of the government's revenue 
would be seriously obstructed and interfered with." To the 
same effect is Earnshaw vs. U. S., 146 U. S. 60. 

In these cases it was also held that the decision of the 
administrative officers that an article was imported merchan- 
dise was final and conclusive on the Courts. 

Sec. 233. In Boardman vs. Thompson, 12 Fed. Rep. 
675, it was held by Mr. Justice Mathews, and concurred in by 
Barr, D. J., that the court had no jurisdiction to prohibit by 
writ of injunction a postmaster from refusing to deliver 
registered letter's and letters containing money orders and 
other matter sent through the mails, on which has been prepaid 
the proper postage, to the party, to whom they are directed. 
The Justice said: "If the alleged right exists to require by 
judicial process the performance of such duty on the part of a 
public officer towards a private individual, then it is a legal 
right, the specific enforcement of which is the proper function 
of a mandamus or replevin for the recovery of the possession 
of the articles or an action of damages against the officer. 
There is no sufficient ground for the interference of equity 
If, on the other hand, a postmaster is responsible only to his 
political superior and amenable to the laws only for such 
breaches of duty as it has provided, as indictment and punish- 



318 Lotteries, Frauds and Obscenity in the Mails. 

ment and removal from office, then the present grievance is as 
much withdrawn from the jurisdiction of a court of equity as 
from the ordinary council of the common law. It is quite 
certain that a perpetual injunction in the terms prayed for 
could not be lawfully granted, for the postmaster might be 
lawfully required by the Postmaster-General to withhold from 
delivery correspondence with a named party, believed by him 
to be engaged in a forbidden business; and an injunction for 
each instance in which it might be shown that no such prohi- 
bition existed would be but an equitable replevin without the 
justification of preventing a multiplicity of suits." 

Sec. 284. These cases go far to show that Congress may 
constitutionally confer power on the Postmaster-G-eneral that 
is conferred by sections 3929 and 4041, E. S., and the fourth 
section of the Act of March 2, 1895. 

But the direct question of the power of the Postmaster- 
General under these laws has been before the Department of 
Justice at Washington and before the courts in several cases. 

Attorney-General Mac Veagh, in an opinion given the 
Postmaster-General, under date of April 27, 1881 (17 Ops. 
Att'y-Gen. 77), speaking of the order against Dauphin, used 
this language: 

"The power conferred upon Congress by the eighth section 
of Article I of the Constitution, 'to establish postofnces and 
postroads' and to make all laws necessary and proper for car- 
rying into execution that power, gives full sovereign control 
over the whole subject, to be exercised by any appropriate 
means. 

The Supreme Court has held the last cited section (Rev. 
Stat., sec. 3894, amended), excluding from the mails all let- 
ters, etc., concerning lotteries, to be constitutional, declaring 
that 'the power possessed by Congress embraces the regulation 
of the entire postal system of the country. The right to 
designate what shall be carried necessarily involves the right to 
determine what shall be excluded.'' (Ex parte Jackson, 96 
U. S. 732). * * * I conclude that if the Postmaster- 
General finds upon evidence satisfactory to him, whatever its 



Lotteries, Frauds and Obscenity in the Mails. 319 

probative force with other minds, that Mr. Dauphin is engaged 
in conducting a fraudulent lottery he may and should forbid 
the delivery of money orders to him, and instruct postmasters 
to return to the senders all registered letters addressed to Mr, 
Dauphin.' 

Sec. 285. On November 12, 1879, the Postmaster-Gen- 
eral issued a "fraud order" under sections 3929 and 4041, E. 
S., U. S., against M. A. Dauphin, and, in December, 1879 
Dauphin filed his bill of complaint in the Supreme Court 
of the District of Columbia, against the Postmaster-General, 
denying the facts on which the order was based, averring ir- 
reparable injury to himself and asking an injunction against 
the further execution of the order. The complainant contended 
that the action of the Postmaster-General, in issuing this order, 
violated the rights and privileges guaranteed to him by the 
Constitution of the United States. Mr. Justice Cox, deliver- 
ing the opinion of the court, held, that the Constitution con- 
ferred the power on Congress to establish postonices and post- 
roads, but this does not impose the duty on Congress to do this ; 
that Congress may provide just such mail facilities as it thinks 
proper and may, from time to time, change and regulate the 
whole postal system at its discretion, as it might leave the 
whole work of mail communication to the States or individual 
enterprise. "It can not, therefore," said the court, "be said 
that the citizen of the United States has any absolute con- 
stitutional right, . or, in other words, that it is one of the privi- 
leges of his citizenship, that his letters shall be carried by the 
United States, at all ; and still less, that they be carried in any 
special manner. Whatever rights he may have in this respect 
exist in the discretion of the Legislature and are entirely dif- 
ferent from those fundamental rights to life, liberty and prop- ; 
erty, which are secured by the Constitution. Since then, 
Congress may or may not, in its discretion, provide a postal sys- 
tem for public convenience, it is difficult to say what conditions 
it may not impose to its use and enjoyment. * * * But, 
while the absolute right of the citizen to have this business con- 
venience provided for him can not be maintained, it may be 



320 Lotteries, Frauds and Obscenity in the Mails. 

said the right exists under the Constitution conditionally ; that 
if Congress shall once exercise its discretionary power, it can 
not discriminate between persons or classes of persons ; it must 
legislate for all alike; all the citizens of the United States have 
a constitutional right to equal participation in the benefits of 
legislation and the use of any instrumentality created by it, 
unelss, at least the exclusion be imposed by way of punish- 
ment for crime and that, after due conviction only; and that 
any condition, destructive of this equality, is repugnant to the 
spirit of the Constitution." The learned Justice then goes 
on to show that while, theoretically, the principle of equality 
underlies all republican government, yet, when the principle is 
applied in practice, we find it can be accepted only with dis- 
tinctions and qualifications. He gives, as instances, the grant- 
ing of the franking privilege to a few, to the granting of 
pensions, in the imposing of discriminating duties on imports 
to encourage home enterprise, by which one class of importers 
bears burdens not imposed on others, in issuing, bonds exempt 
from taxation and excluding some citizens from the franchise. 
The Slaughter House cases, 16 Wall, 36, were referred 
to as another instance, where the Supreme Court of the United 
States held that persons and property can be subjected to all 
kinds of restraint and burdens in order to secure the general 
comfort. Justice Cox then argues that the legislation in ques- 
tion authorized the Postmaster-General to refuse to deliver 
registered letters to parties whom he found to be operating- 
lottery and fraudulent schemes, in the interest of public 
morals, and because it is almost if not quite impossible other- 
wise to prevent this public convenience from being made an 
instrument of corruption and adds that "if it be shown * * * 
that the rule of equality can be departed from on any ground, 
it is impossible to deny that it may be, when this is deemed 
necessary by Congress, to prevent a great evil and to prevent 
what is designed for a blessing from being converted into a 
curse. * * * The application of the principle of equality 
to this case would be that Congress has no right to provide 
these special mail facilities for the innocent without, at the 



Lotteries, Frauds and Obscenity in the Mails. 321 

same time, conceding them to notorious and professional 
wrongdoers, to whom they would afford the most powerful 
agency for wrong doing and that the latter must have the same 
use of the federal agency as others, until accident shall betray 
their abuse of it and this shall be followed by judicial con- 
viction. We can not believe that the Government is bound 
to such an inflexible rule of equality as will involve these 
results. The right of every citizen to the benefit of the discre- 
tionary legislation of Congress must be subject to the necessity 
of public health, morals, order and the general welfare and the 
efficient execution of the powers expressly conferred by the 
Constitution. It was also contended by Dauphin, that to 
deny a citizen the benefits of any Act of Congress, especially 
on the ground that he is engaged in an unlawful occupation, is 
punishment, and that to authorize the Postmaster-General to 
execute the provisions of the law in this respect is to authorize 
the infliction of this punishment without due process of law in 
defiance of the guarantees of the Constitution, and is equiva- 
lent to investing the Postmaster-General with judicial power, 
which can only be lodged in the courts. The court, in answer 
to this contention, discusses the difference between funda- 
mental rights and privileges conferred by legislation. The 
right to life, liberty and property is held to be fundamental, 
inalienable and antedating all constitutions and this right is 
what the Constitution protects. Congress might repeal the 
whole law relating to the registration of letters or might au- 
thorize the Postmaster-General to suspend or abolish the sys- 
tem when he should think the privilege was abused by dis- 
seminating immoral matter, and, in that case, it could not be 
claimed that the people generally were deprived of any prop- 
erty in a privilege that might, at any time, be withdrawn by 
Congress. "If the repeal of this law could not be held to de- 
prive the people generally of their property without due pro- 
cess of law then the withdrawal from complainant of the right 
to receive registered letters, even supposing him to have been 
previously entitled to it, under the law, can not be said to have 
21 



322 Lotteries, Frauds and Obscenity in the Mails. 

such effect as to him, unless such effect be found in the mere 
fact of discrimination against him. Whether this be so will 
depend upon the question already discussed, viz.: Whether 
the complainant has a constitutional right to the privilege of 
the registry system simply because others have it. For if he 
has not, as we think has been sufficiently shown, then the with- 
drawal of the privilege from him while others still retain it 
dots not deprive him of any property in the constitutional 
sense of the term." 

The distinction between absolute rights and mere legisla- 
tive privileges is brought out in the franchise cases, Anderson 
vs. Baker, 23 Md., 531 and Blair vs. Kidgely, 41 Mo. 63. In 
these and other cases it is held that the right to vote is not 
protected by the Constitution of the U. S. but it is exclusively 
within the control of the State and may be enlarged or con- 
tracted at the pleasure of the State. 

Justice Cox says: a The terms 'due process of law,' as 
employed in the Constitution, apply only to the fundamental 
rights referred to in that instrument and are inapplicable to 
mere privileges of legislative creation. As to these the law of 
England furnishes no precedent, but the law of their creation, 
determines the terms and conditions of their enjoyment and by 
what process they shall terminate. 

The objection that the statute under consideration at- 
tempts to clothe the Postmaster-General with judicial power 
is mainly founded upon the assumption, which we consider er- 
roneous, that his action in pursuance of it is virtually a trial 
and penal judgment against the party affected by it. But if 
it be not so, as has been shown, there is no ground for the 
objection. There is probably not an important office in the 
Executive Departments in which it is not necessary to exercise 
judgment in sueh a manner as to affect private interests in car- 
rying the laws into effect, and yet that this is the exercise of 
judicial power of the United States, which belongs only to its 
courts, has not been pretended." 

The court further held, in that case, that the issuance of 
the order did not inflict punishment on Dauphin, but was pre- 



Lotteries, Frauds and Obscenity in the Mails. 323 

vention, resorted to, because of the difficulty or impossibility, of 
detection. Its object is plainly not to punish, but to preserve 
the mails from misuse. Dauphin vs. Key, 4 McArthur, 203, 

Sec. 286. The case of the New Orleans National Bank 
vs. Merchant, 18 Fed. Eep. 841, was decided by Judge Pardee 
in the Circuit Court, Eastern District of Louisiana in Janu- 
ary, 1884. Plaintiff applied for an injunction to restrain 
defendant from refusing to deliver to it registered letters ad- 
dressed to it and to pay money orders in its favor. The de- 
fendant set up as a defense an order of the Postmaster-General 
directing him to deliver to plaintiff "no registered letters and 
redeem no money orders payable to it/' but in that order there 
was no finding that plaintiff was then conducting through the 
mails any lottery scheme or scheme to defraud. The Judge 
granted the injunction and after referring to the decision in 
Dauphin vs. Key, supra, decided "that the foregoing statute 
giving authority to the Postmaster-General to determine upon 
evidence satisfactory to him whether any person engaged in one 
of the schemes or enterprises described therein and thereupon to 
forbid the use of the registered letter and money order systems 
is constitutional. * . * * To this I agree and I refer to the 
learned opinion rendered in that case by Justice Cox, as the 
organ of the court, as an answer to all the arguments addressed 
to me on this hearing on the constitutionality of said laws. 
Every point raised here on that question seems to have been 
passed on by Justice Cox." 

The Judge then proceeded to the discussion of the ques- 
tion whether the court can in any case grant relief against the 
action <rf the postal authorites, and he comes to the conclusion 
that it can. He found that the order issued by the Postmaster- 
General, in the case, did not, in essential particulars, comply 
with the law and for that reason it constituted no justification 
to the defendant to refuse to deliver registered letters and 
pay money orders to plaintiff. He relied mainly on the opin- 
ion of the Supreme Court of the United States in Teal vs. 
Fetter, 12 How. 284. 



324 Lotteries, Frauds and Obscenity in the Mails. 

The Judge, in this case, also held that "the fair import of 
the law is that a deprivation of the registered letter and money 
order system shall only continue while the offending party is 
engaged in one of the schemes or enterprises described in the 
Statute and, while the Postmaster-General is satisfied he is so 
engaged. h * '* When Postmaster-General Key ceased 
to be satisfied on the evidence submitted * * * it was 
his duty to revoke the order." 

Sec. 287. In Enterprise Savings Association vs. Zum- 
stein (67 Fed. Rep. 1000), the plaintiff being one of the so- 
called bond investment companies, the power of the Post- 
master-General to issue fraud orders was upheld, the circuit 
court of appeals (composed of Taft and Lurton, circuit judges, 
and Severens, district judge), saying: 

"It must follow from the exclusive 1 and absolute power of 
Congress over the whole subject of what may be carried and 
what may be excluded from the mails that it was entirely 
within its competency to confer authority upon the head of the 
Postal Department to direct a postmaster to refuse the delivery 
of registered letters addressed to a person or corporation which 
was engaged in conducting a lottery enterprise through the 
use of the registered letter department, or to forbid the pay- 
ment of a postal money order drawn in favor of one engaged in 
conducting such a business by means of the assistance of that 
department of the postofiice, and that he might make such 
order upon evidence satisfactory to him. Neither the making 
of such an order, nor its enforcement, required or permitted 
the opening of any such registered letter, and the statute ex- 
pressly prohibits the opening of any letter by the postmaster 
not addressed to himself. Neither of those departments of the 
postal service are essential to the ordinary use of the mails, 
and Congress has reposed in the Postmaster-General an unlim- 
ited discretion as to when and where he would extend the 
facilities afforded by those departments. (Rev. Stat., sees. 3929, 
4041). We see no reason why Congress may not confer on 
him authority to prevent the use of those facilities by any per- 
son engaged in using them for the propagation of a business 



Lotteries, Frauds and Obscenity in the Mails. 325 

deemed by it vicious and not entitled to suck special facilities 
in the extension and conduct of such schemes, The authority 
to inhibit the use of those postal facilities had to be vested 
somewhere. It was a matter pertaining to executive business, 
and was therefore imposed upon the executive head of the 
Postal Department. In the case of Commerford vs. Thomp- 
son and Bank vs. Merchant, heretofore cited, the power of 
Congress to vest such an authority in the Postmaster-General 
was not questioned, but admitted by both Judges Brown and 
Pardee. The whole question was elaborately considered in 
Dauphin vs. Key (4 McArthur, 203)." 

Judge Thomas, in the case brought by the Tontine Sav- 
ings Association at St. Paul, Minn. ; Judge Phillips, in the case 
of the Pettis County Bond and Investment Company at 
Jefferson City, Mo., and Judge Newman, in the case of the 
Equitable Loan and Security Company at Atlanta,Ga., upheld 
the power to issue such orders. 

The case of Commerford vs. Thompson (1 Fed. Rep. 
417), is not in conflict with the above cases. The court 
there was dealing with ordinary mail matter long prior 
to the Act of March 2, 1895, and its ruling is precisely in line 
with the practice of the Department until after the passage of 
that Act. 

Sec. 288. The second question presented for discussion 
under this head is whether the effect of the power, conferred 
on the Postmaster-General by the fourth section of the Act of 
March 2, 1895, is to deprive citizens of their property or lib- 
erty without due process of law. 

The foregoing rulings and decisions were made upon 
the Statutes as they existed prior to the enactment of 
the fourth section of the Act of March 2, 1895, and those, 
who wish to operate lottery and fraudulent schemes through 
the mails, have not abandoned their contention that the above 
cited Act is unconstitutional because it deprives the party 
against whom a "fraud order" may be issued of the ordinary 
as well as extraordinarv facilities of the mail service and they 



326 Lotteries, Frauds and Obscenity in the Mails. 

seize upon what is said in the Dauphin and Zumstein Cases 
about the extraordinary facilities afforded by the Registry 
and Postal Money Order Systems of the Postoffice Establish- 
ment, upon which to base an argument for a distinction be- 
tween these extraordinary facilities and the use of the mails 
in the transmission of ordinary matter. The courts, in the 
above cases, were speaking of the policy and not of the power 
of Congress in the enactment of these laws, as they existed ac 
the time the decisions were rendered The principle laid down 
by the courts in those cases apply with equal force, if not 
greater force, to the power conferred on the Postniaster-Gen- 
eral by the fourth section of the Act of March 2, 1895 and the 
distinction attempted to be made between an order forbidding 
the delivery of registered letters and the payment of money 
orders and one forbidding the delivery of any mail matter 
whatsoever is not well founded. 

Sec. 289. It is contended that while Congress may confer 
on the Postmaster-General power to issue an order depriving 
a citizen of the use of the Registry and Money Order Systems 
of the Postal Establishment, it can not confer power on that 
officer to deprive a citizen of the use of the mails in sending 
and receiving ordinary mail matter on the ground that the 
Registry and Money Order Systems being extraordinary mail 
facilities there is a difference in the right or liberty to use 
the mails for them and to use the mails for the transmission of 
ordinary mail matter. But there is no difference in principle. 

Sec. 290. The right to use the mails at all is not 
inherent, inalienable, but is subject to the control of Congress. 
The right is statutory only and it must be exercised subject to 
all the reasonable conditions prescribed by Congress. The 
right to use the mails for ordinary mail matter is as much a 
statutory right as is the use of the Registry and Money Order 
Systems ; and it seems evident the power to deprive a citizen of 
one necessarily implies the power to deprive him of the other. 
It is argued that while Congress possesses the power to au- 
thorize the Postmaster-General to deny the use of the mails for 
the dissemination of the prohibited matter, it can not authorize 



Lotteries, Frauds and Obscenity in the Mails. 327 

him to refuse the use of the mails for the transmission of legi- 
timate matter. So far as open or unsealed matter is concerned 
this is true. The Postmaster-General does not claim to have 
the power nor does he exercise the power to refuse to deliver 
legitimate matter when not under seal to a party though he 
has found that such party is conducting a lottery or fraudulent 
scheme through the mails. But when it comes to sealed mat- 
ter the rule is different. As, has been seen, the Postoffice De- 
partment regards the seal of a letter or a packet as sacred and 
the Postmaster-General has no authority by law to break it to 
see what it covers and this being true, the only way left for him 
to act in regard to sealed matter, addressed to the operator of a 
fraudulent or lottery scheme, is to refuse to deliver any of it. 
But because some of it may contain unobjectionable matter, 
the power of the Postmaster-General to refuse to deliver any of 
it is denied. But the power, as has been said, to refuse to 
deliver registered letters or pay money orders necessarily 
implies the power to refuse to deliver ordinary mail. The 
principle in both cases is precisely alike, except probably that 
the power to refuse to deliver registered letters or pay money 
orders stands on less solid ground than the power to refuse to 
deliver ordinary mail matter, because in the former, money 
or property is involved and the right to such matter is, in the 
strict sense, a property right, while as a rule in the other class 
property rights are not directly involved. It matters not, 
however, whether any such difference exists or not and the 
subject may be treated on the broad ground that the right 
in each case is the same in principle. In both cases the matter 
is sealed and is not therefore open to the inspection of the 
postmaster and as a registered letter may contain matter, 
money or property pertaining to a perfectly legitimate transac- 
tion, and as a money order, which the postmaster sees, may be 
in payment of an honest debt or for the purchase of some 
article of merchandise, it would seem to follow as a necessary 
consequence that if the power to refuse to deliver such regis- 
tered letter or pay such money order which may relate to one 
of the prohibited schemes, on the ground that the Postmaster- 



328 Lotteries, Frauds and Obscenity in the Mails. 

General has found, on evidence satisfactory to him, that the 
party, to whom the one is addressed and the other is payable, 
is engaged in conducting snch scheme through the mails be a 
valid power, the power to refuse to deliver ordinary mail mat- 
ter, under like conditions, can not on principle be denied. But 
Judge Barr apparently made this distinction in Hoover vs. Mc- 
Chesney, 81 Fed. Bep. 472. The learned Judge in that case 
in order to escape the precedent of the Zumstein case made also 
a distinction between the right of an individual and of a cor- 
poration under the Fourteenth Amendment to the Constitu- 
tion. He decided that the Postmaster-General had the power 
to issue an order against a corporation under the fourth section 
of the Act of March 2, 1895, but that section, so far as it au- 
thorized an order against an individual citizen, was unconstitu- 
tional and void. In this the judge was clearly in error. 

Sec. 291. The Supreme Court of the United States in 
Covington and L. T. Co. vs. Sandford, 164 U. S. 578, and Ky. 
Co. vs. Mathews, 165 U. S. 150, held distinctly that corpora- 
tions are persons within the meaning of the constitutional pro- 
vision forbidding the deprivation of property or liberty with- 
out due process of law as well as a denial of the equal protec- 
tion of the laws. And in Fairfield Floral Co. vs. Bradbury, 
89 Fed. Bep. 393, Judge Putnam, in commenting upon the 
above case, disposes of this position of Judge Barr by saying 
that he could not assent to the refinement made by the judge 
in that case that the decision of the Court of Appeals in Asso- 
ciation vs. Zumstein, 67 Fed. Bep. 1000, involved any distinc- 
tion between an individual and a corporation, but he appar- 
ently held that Congress had no power to authorize the Post- 
master-General, by fraud order, to deprive an individual or 
corporation of the ordinary use of the mails for legitimate 
purposes, though he may, under the statutes, deny them the 
privileges of the registered letter or money order department-. 

And then Judge Putnam proceeded to dismiss complain- 
ant's bill for an injunction to restrain the enforcement of a 
fraud order issued by the Postmaster-General forbidding the 
delivery to him of ordinary mail matter, as well as registered 



Lotteries, Frauds and Obscenity in the Mails. 329 

letters, on the ground that he had failed to allege or show that 
his business was legitimate and remanded him to his remedy 
at law. It is not clear what was intended to he decided in this 
case; but it appears the judge followed the ruling in Commer- 
ford vs. Thompson, 1 Fed. Eep. 417 (though that case was not 
cited), where it was held that before a party can have an in- 
junction he must come into court with clean hands and a party 
seeking to enjoin the postal officials from interfering with his 
mail matter must allege and prove that the matter attempted 
to be interfered with does not concern any of the prohibited 
schemes. 

In this case the judge apparently makes the distinction 
between the right to use the registry and money order systems 
and the use of the mails for ordinary purposes, which has been 
shown not to exist. 

The remanding of the party to his remedy at law, how- 
ever, indicates that the court thought the statute, so far as it 
clothed the Postmaster-General with the power to refuse to 
deliver ordinary mail matter, is unconstitutional. There is 
another reason why we may infer the court must have thought 
the statute unconstitutional and that is he intimated that if the 
plaintiff had alleged and proved that his business was legitimate 
he would have granted the injunction, as he could not have in- 
terfered with the duties of the Postmaster-General upon any 
other theory than that the law, under which he claimed to act, 
is unconstitutional, it being well settled that the courts have 
no right to interfere by mandamus or injunction with the min- 
isterial and official duties conferred on one of the Executive 
Departments of the Federal Government. The cases above 
reviewed show this conclusively. 

The learned judge in this case seems to have overlooked 
the fact that the law under which the "fraud order" in the 
Zumstein case was issued did not authorize the refusal to de- 
liver ordinary mail matter. The order in that case was issued 
prior to the passage of the Act of March 2, 1895, and hence 
the power conferred by that act was not involved, discussed 
or decided. 



330 Lotteries, Frauds and Obscenity in the Mails. 

Sec. 291a. Another contention of the promoters of lot- 
tery and fraudulent schemes and which Judge Barr sustained 
in the Hoover case is that as some of the sealed matter ad- 
dressed to the parties against whom fraud orders are issued 
can not be returned to the senders because their names are un- 
known and hence must be sent to the Dead Letter Office and 
opened, the orders in question authorize an "unreasonable seiz- 
ure and search" of the private papers of the citizen. This is 
an entire perversion of the words "seizure and search" as used 
in this connection in the Constitution. The Government, as 
a common carrier of mail matter, under the laws of Congress, 
finds certain letters and packets in the mails, which it can not 
deliver and which it refuses to deliver, and it returns them to 
the senders, if known by matter on the envelopes or wrappers, 
and if not thus known, it takes the only other recourse it has 
left, and that is to send them to the Dead-Letter Office, with 
directions to open them, get the senders' names, and return 
to them. This Department has always held that a letter 
opened in the Dead-Letter Office is still constructively under 
seal, and hence there is no prying into mail matter nor any 
attempt made to detain or confiscate its valuable contents, but 
the object and the only object is to return it to the sender, and 
all this is done for the latter' s benefit. Hence there can be no 
"seizure or search" within the meaning of the Constitution, 
in the enforcement of these laws. 

In no single instance has the Department used matter 
opened in the Dead-Letter Office, either under the general reg- 
ulations of the Department or under the operation of fraud or- 
ders, as evidence in any civil or criminal prosecution against 
the sender, or otherwise. 

Sec. 292. But as opposed to the Hoover and the Fair- 
field Floral Co. cases we have the opinion of Attorney-General 
Harman and a ruling by Judge Grosscup of Chicago. 

Fraud orders were issued against the Pettis County Bond 
Investment Co., and others, under the fourth section of the 
Act of March 2, 1895, and Attorney-General Harman after 



Lotteries, Frauds and Obscenity in the Mails. 331 

a most exhaustive argument on the constitutionality of that 
section on the appeal of such companies said: 

"These acts were within the constitutional authority of 
Congress, and empower you to deny all mail facilities to those 
whom you may find to be engaged in any of the classes of busi- 
ness described. (Ex parte Jackson, 96 IT. S. 727; In re 
Kapier, 143 IT. S. 110)." 

Sec. 293. In Lansing and Co. vs. Hessing, postmaster 
at Chicago, in a proceeding commenced before Judge Gross- 
cup in September, 1896, the plaintiffs applied for an injunc- 
tion to restrain the defendant from retaining and refusing to 
deliver letters addressed to them. The defendant as a defense 
set up a "fraud order," issued by the Postmaster-General under 
the Act of March 2, 1895, directing him to refuse to deliver 
ordinary mail matter as well as registered letters to plaintiffs 
on the ground that the Postmaster-General found they were 
conducting a scheme to defraud through the mails. At the 
trial plaintiffs insisted: 1. That the Act of March 2, 1895 
(28 Stat. L. 963), enlarging the powers of the Postmaster- 
General, applied only to those operating lottery schemes 
through the mails. 2. That the Acts of September 19, 1890 
(26 Stat. L. 465), and the Act of March 2, 1895, supra, were 
unconstitutional because they deprived plaintiffs of their prop- 
erty without due process of law. , 

These contentions were overruled by the court and the 
bill for injunction was dismissed October 29, 1896. No opin- 
ion of Judge Grosscup in the case was filed and the reasons 
given for the action t?ker can not re given more fully. 

THE^NATURE OF THE EIGHT OF A CITIZEN TO USE THE MAILS. 

Sec. 294. It should be conceded at the threshold, that this 
is a valuable right within the protection of the Constitution 
of the United States. That it is a statutory right, however, 
is plain and the citizen must exercise the right subject to all 
the reasonable conditions and restraints Congress may pre- 
scribe. It has been shown that the right to the use of the or- 
dinary mail facilities is the same as that to the use of the extra- 



332 Lottefies, Frauds and Obscenity in the Mails. 

ordinary. Judge Barr in the Hoover case calls it a property 
right. This is not strictly true, but it is rather a "liberty" 
within the meaning of the Fourteenth Amendment to the 
Constitution. That is what Judge Story calls this right (Story 
on the Constitution, 4 Ed., sec. 1937), and that is what the 
Supreme Court of the United States calls it in Allgeyer vs. 
State, 17 Sup. Ct. Kep. 427; 165 U. S. 578. The right to the 
use of the mail service being of this character a citizen can not 
be deprived of it except by due process of law nor can Congress 
pass any law which does not apply alike to all similarly situ- 
ated. 

"Due process of law" is equivalent to "Law of the Land." 
Assuming that it has already been shown that the Post- 
master-General in executing the function conferred on him by 
sections 3929 and 4041 and section four of the Act of March 
2, 1895, exercises discretion and judgment and hence is not 
subject to the control of the courts, the only phase of the ques- 
tion, that it is necessary now to examine is whether the order 
authorized by this statute is "due process of law" or is issued 
according to the "law of the land." 

The main argument made by Judge Barr, in the Hoover 
case is that the law does not provide for notice and a hearing 
before the "fraud order" is issued. In many of the cases 
already cited it was held that in the administration of the law 
by the Executive Department notice to the party to be effected 
and a hearing before action is not necessary even in cases in- 
volving unquestioned rights of property. In countless instances 
parties are deprived of their liberty and at least the use of 
their property without notice or a hearing. Parties may be 
imprisoned and are imprisoned upon warrants issued upon an 
affidavit made by a private individual or by the ex parte action 
of an official or a grand jury without a hearing and so have 
parties been deprived of the temporary use of their property 
by a writ of replevin issued in the same way without notice 
and private papers have been seized upon like ex parte process. 
In all these cases and in many more that might be mentioned 
the courts in England and America have never hesitated to 



Lotteries, Frauds and Obscenity in the Mails. 333 

hold such process "due process of law" or process according to 
the "law of the land." It is true in these cases the parties had 
a right to appear afterwards and contest the matter but yet the 
fact remains that they had suffered a deprivation of their lib- 
erty or the use of their property or had been subjected to hav- 
ing their premises searched and their private papers seized in 
the meantime, without in the first instance having had notice 
or a hearing. But in some of the cases, heretofore cited, and 
in cases yet to be cited, the Supreme Court of the United 
States held that the action of the Executive Department of the 
Government is final and conclusive upon the courts, though no 
notice was given in the first instance nor any hearing had or 
allowed afterwards. But a distinction must be noted here 
between a liberty or property right touching a legitimate mat- 
ter and such iiberty or right when it relates to matter deemed 
injurious to the public morals or health. In the latter case 
the liberty or right is not within the protection of the Consti- 
tution of the United States. This is shown beyond question 
by the following cases. 

Sec. 295. A statute of ISTew York provided that all ten- 
ement houses should be furnished by the owners with sufficient 
Croten or other water on each floor occupied or intended to be 
occupied whenever they shall be directed so to do by the Board 
of Health and a penalty for failure to comply with such order 
was imposed. In Health Department vs. Hector, 145 1ST. Y. 
32, it was sought to recover the penalty against the defendant 
for failing to comply with the order of the Board in regard to 
two houses which had been erected prior to the passage of the 
statute^ Among other things the defendant contended that 
the order of the Board of Health was made without notice and 
that, as it could not be complied with, except by the expendi- 
ture of a considerable amount of money the result would be to 
deprive the defendant of its property without a hearing and an 
opportunity for what defense it might have, and that, in fact, 
it deprived the defendant of its property without due process 
of law. The Court of Appeals of New York, speaking through 
Peckham, J., said: "There was no arrangement in either of 



334 Lotteries, Frauds and Obscenity in the Mails. 

these houses in question for the supplying of the Croten or 
other water to the occupants of each floor at the time when the 
order of the Board of Health was made; such order therefore 
could not be complied with on the part of the defendant with- 
out the expenditure of money for that purpose. That fact 
must be assumed, and, even upon that assumption, we do not 
think the act invalid on the alleged ground that it deprives the 
defendant of its property without due process of law. The 
act must be sustained, if at all, as an exercise of the police 
power of the State. * * * Assuming that this act is a 
proper exercise of the power, in its general features, we do not 
think that it can be regarded as invalid because of the great 
fact that it will cost money to comply with the order of the 
Board for which the owner is to receive no compensation or 
because the Board is entitled to make the order under the pro- 
visions of the act without notice and a hearing of the defend- 
ant. As to the latter objection it may be said that in enacting 
what shall be done by the citizen for the purpose of promoting 
the public health and safety it is not usually necessary to the 
validity of the legislation upon that subject that the party shall 
be heard before he is bound to comply with the direction of the 
legislature. People vs. Board of Health, 140 1ST. Y. 1, 6. 
The legislature has power and has exercised it in countless in- 
stances to enact general laws upon the subject of the public 
health and safety without providing that the parties, who are 
to be affected by those laws, shall first be heard before they 
shall take eifect in any particular case. * * * The fact 
that the legislature has chosen to delegate a certain portion 
of its power to the Board of Health and to enact that the 
owners of certain tenement houses should be compelled to fur- 
nish this water after the Board of Health had so directed, 
would not alter a jfrinciple nor would it be necesssary to pro- 
vide that the Board should give notice and afford a hearing be- 
fore it made such order. I have never understood that it was 
necessary that any notice should be given under such circum- 
stances before the provisions of this nature could be carried 
out." 



Lotteries, Frauds and Obscenity in the Mails. 335 

The opinion of Justice Peckham in this case is most ex- 
haustive and it was held that the act in question was a reason- 
able exercise of the police power of the State. Judge Bart- 
lett dissented but not on the ground that notice and a hearing 
were necessary but on the ground that the exercise of power 
in such a case was unreasonable and oppressive. 

Sec. 296. "Regulations for the preservation of the health, 
morals and welfare of the people may press with more or less 
weight upon one than upon another, but they are designed not 
to impose unequal or unnecessary restrictions upon anyone but 
to promote with as little individual inconvenience as possible 
the general good; and the 14th Amendment does not apply 
to the exercise of the police power of the State. The incon- 
venience arising in the administration of police laws are mat- 
ters entirely for the consideration of the State ; they are to be 
remedied only by the State." Barbin vs. Connolly, 113 U. S. 
27. 

Sec. 297. In excluding various articles from the mail 
the object of Congress has not been to interfere with the rights 
of the people, but to refuse its facilities for the distribution of 
matter deemed injurious to the public morals. Ex parte 
Doran, 32 F. R. 76. 

Sec. 298. In Powell vs. Pennsylvania, 127 U. S. 678, 
a statute, making it unlawful to manufacture or sell oleomar- 
garine altogether, was upheld though it was offered to be 
shown that that article, if properly made, was a wholesome 
food. Mr. Justice Harlan, delivering the opinion of the court, 
used this language : "If all that can be said of this legislation 
is thai* it is unwise or unnecessarily oppressive to those manu- 
facturing or selling wholesome oleomargarine as an article of 
food, their appeal must be to the legislature or to the ballot 
box and not to the judiciary." 

Sec. 299. The Supreme Court of the United States in 
Lawton vs. Steele, 152 U. S. 132, 135, lays down the rule, in 
regard to the exercise of the police power, in the following 
terms: "It (the police power) is universally held to include 
everything essential to the public safety, health and morals 



336 Lotteries, Frauds and Obscenity in the Mails. 

and that the State may interfere wherever the public interests 
demand it and, in this particular a large discretion is necessa- 
rily vested in the legislature to determine not only what the 
interests of the public require, out what measures are neces- 
sary for the protection of such interests. Barbin vs. Connelly, 
113 TJ. S. 27; Kidd vs. Pearson, 128 U. S. 1. To justifiy the 
State in thus interposing its authority in behalf of the public 
it must appear, first, that the interests of the public generally, 
as distinguished from those of a particular class, require such 
interference ; second, that the means are reasonably necessary 
for the accomplishment of the purpose and not unduly op- 
pressive upon individuals. " In this case, where a fishing net 
had been summarily destroyed without a hearing under a 
statute of New York, the court went on to say that the 
"legislature, however, undoubtedly possessed the power 
not only to prohibit fishing in these waters, but to 
make it a criminal offense and to take such measures 
as were reasonable and necessary to prevent such offenses 
in the future. It certainly could not do this more 
effectually than by destroying the means of committing the 
offense. If the nets were being used in a manner detrimental 
to the public, we think it was within the power of the legisla- 
ture to declare them to be nuisances and to authorize the offi- 
cers of the State to abate them. * * * While the legisla- 
ture has no power to arbitrarily declare that to be a nuisance 
which is clearly not so, a good deal must be left to its discre- 
tion in that regard, and if the object to be accomplished is con- 
ducive to the public interests, it may exercise a large liberty 
of choice in the means employed. Newark and S. 0. H. C. R. 
Co. vs. Hunt, 50 N. J. L. 308; Blazin vs. Miller, 10 Hun. 435; 
House's case, 12 Coke, 62; Stone vs. New York, 25 Wend. 
173; American Print Works vs. Lawrence, 21 N. J. L. 248; 
23 K J. L. 590." 

And, in another place, the Court said: "An act of the 
legislature, which has for its object the preservation of the 
public interests against illegal deprivation of the rights of pri- 



Lotteries, Frauds and Obscenity in the Mails. 337 

vate individuals ought to be sustained unless it is plainly 
violative of the Constitution or subversive of private rights." 

Sec. 300. The Supreme Court of the United States in 
Crowley vs. Christensen, 137 IT. S. 86, 94, said: "There is no 
inherent right in a citizen to thus sell intoxicating liquors by 
retail; it is not a privilege of a citizen of the State or of the 
United States. As it is a business attended with danger to the 
community, it may, as already said, be entirely prohibited, or 
be permitted under such conditions as will limit, to the Utmost, 
its evils. The manner and extent of regulation rest in the 
discretion of the governing authority. That authority may 
vest in such officers, as it may deem proper, the power of passing 
upon applications for permission to carry it on, and to issue a 
license for that purpose. It is a matter of legislative will only. 
As in many other cases, the officers may not always exercise 
the power conferred upon them with wisdom and justice to the 
parties affected. But that is a matter which does not affect 
the authority of the State or one which can be brought under 
the cognizance of the Courts of the United States." 

Sec. 301. In Mugler vs. Kansas and Kansas vs. Zie- 
bald, 123 U. S. 623, a statute of Kansas, prohibiting the man- 
ufacture or sale of intoxicating liquors as a beverage and de- 
claring all places where such liquors were manufactured or sold 
. in violation of the statute to be common nuisances and prohib- 
iting their future use for the purpose, was held to be a valid 
exercise of the police power of the State, even as applied to per- 
sons who, long before the passage of the act, had constructed 
buildings specially adapted to such manufacture and of but 
little value for any other object. It was held, in that case, that 
the state* could lawfully prohibit the manufacture of liquors 
for one's private use, if such manufacture was deemed preju- 
dicial to the rights and interests of the community and that the 
power to determine what was prejudicial to society was lodged 
in the legislature. 

Sec. 302. The police power extends not only to things 
intrinsically dangerous to the public health or injurious 
. 22 



338 Lotteries, Frauds and Obscenity in the Mails. 

to the public morals, such as infected rags or diseased 
meat, but to things which, when used in a lawful man- 
ner, are subjects of property and commerce and yet may 
be used so as to be injurious or dangerous to the life, 
health, or the morals of the people. Gunpowder is a 
subject of commerce and of lawful use, yet, because of its 
explosive and dangerous qualities, all admit that the State may 
regulate its keeping and sale. Liquor, bottles, glasses and 
other utensils used in connection with liquor, and fishing nets, 
are articles of legitimate use in some respects and yet, they 
may be lawfully destroyed as constituting nuisances because 
they may be put to uses injurious to the health and morals of 
the people. Mugler vs. Kansas, supra. 

Sec. 303. In Fertilizing Co. vs. Hyde Park, 97 U. S. 
659, the Company had been granted a charter by the State of 
Illinois for the purpose of converting, by chemical process, the 
dead animal matter of the slaughter houses of Chicago for fifty 
years.. The company, under the charter, erected buildings 
and appliances costing $200,000. The village of Hyde Park, 
where the establishment was located, passed an ordinance, au- 
thorized by the law of the State, prohibiting any one from 
carrying on any unwholesome or offensive business or estab- 
lishment within the limits of the village, or to transport offal 
through it. The Court held that the property was erected 
and the money invested subject to the future exercise of the 
police power of the village, acting under state authority. The 
effect of this ruling was to substantially destroy the value of 
the property of the company before the expiration of .its char- 
ter. 

Sec. 304. In Boston Beer Company vs. Massachusetts, 
97 U. S. 25, the Supreme Court of the United States, affirming 
the judgment of the Supreme Judicial Court of Massachusetts, 
held that a statute of the State, prohibiting the manufacture 
and sale of intoxicating liquors, applied to a corporation which 
the State had long before chartered and authorized to hold 
real and personal property for the purpose of manufacturing 
such liquors. Among the reasons assigned by the Court for 



Lotteries, Frauds and Obscenity in the Mails. 339 

its judgment were the following: "If the public safety or the 
public morals require the discontinuance of any manufacture 
or traffic the hand of the legislature can not be staid from pro- 
viding for its discontinuance by any incidental inconvenience 
which individuals or corporations may suffer. All rights are 
held subject to the police power of the State. Whatever dif- 
ferences of opinion may exist as to the extent and boundaries 
of the police power and however difficult it may be to render a 
satisfactory definition of it, there seems to be no doubt that it 
does extend to the protection of the lives, health and property 
of the citizens and to the preservation of good order and the 
public morals. The legislature can not, by any contract, di- 
vest itself of the power to provide for these objects. They 
belong emphatically to that class of objects which demand the 
application of the maxim salus, populi suprema lex; and they 
are to be attained and provided for as the legislative discretion 
may devise. That discretion can no more be bargained away 
than the power itself." 

Sec. 305. The State of Mississippi, by an act passed by 
the legislature, January 16, 1867, authorized the Mississippi 
Agricultural, Educational and Manufacturing Aid Society to 
dispose of lands and other property by the casting of lots, by 
chance or otherwise, for a period of twenty-five years, for 
which privilege said Society paid the State $5,000 and agreed 
to pay the sum of $1,000 annually, and "one-half of one per 
cent on the amount of receipts derived from the sale of tick- 
ets/' and did pay these sums for some time. 

In 1868 the State, by a Constitutional provision, prohib- 
ited the legislature from authorizing any lottery and declared 
that any lottery theretofore authorized should not be permitted 
to be drawn, or tickets therein sold. By an act of the legisla- 
ture passed in 1876 enforcing the provisions of the Constitu- 
tion, it was made unlawful to conduct any lottery in the State. 

The validity of the constitutional provision and the act 
of 1876 as to the said society was brought in question in the 
case of Stone vs. State of Mississippi, 101 U. S. 814. The 
chief justice, in delivering the opinion of the court, said: "All 



340 Lotteries, Frauds and Obscenity in the Mails. 

agree that the legislature of the State can not bargain away 
the police power of the State. 'Irrevocable grants of prop- 
erty and franchises may be made if they do not impair the 
supreme authority to make laws for the right government of 
the State; but no legislature can curtail the power of its suc- 
cessors to make such laws as they may deem proper in matters 
of police.' Metropolitan Bd. of Excise vs. Barin, 34 N. Y. 
657; Boyd vs. Alabama, 94 IT. S. 645, Many attempts have 
been made in this court and elsewhere to define the police 
power but never with entire success. It is always easier to 
determine whether a particular case comes within the general 
scope of the power than to give an abstract definition of the 
power itself which will be, in all respects, accurate. ~Eo one 
denies, however, that it extends to all matters affecting the 
public health or the public morals. Beer Co. vs. Massachu- 
setts, 97 U. S. 25; Patterson vs. Kentucky, 97 U. S. 501.. 
Neither can it be denied that lotteries are proper subjects for 
the exercise of the power. We are aware, that, formerly, 
when the sources of the public revenue were fewer than now, 
they were used in some or all of the States, and even in the 
District of Columbia, to raise money for the erection of public 
buildings, making public improvements and not unfrequently 
for educational and religious purposes; but this Court said 
more than thirty years ago, speaking through Mr. Justice 
G-rier, in Phalen vs. Virginia, 8 How. 163, that 'experience", 
has shown that the common forms of gambling are compara- 
tively inocuous when placed in contrast with the widespread 
pestilence of lotteries. The former are confined to a few per- 
sons and places, but the latter infests the whole community; 
it enters every dwelling; it reaches every class; it preys upon 
the hard earnings of the poor; and it plunders the ignorant and 
simple.' * * * No legislature can bargain away the pub- 
lic health or the public morals.. The people themselves can 
not do it, much less their servants. * * * The con- 
tracts, which the Constitution protects, are those that relate to 
property rights, not governmental. It is not always easy to 
tell on which side of the line which separates governmental 



Lotteries, Frauds and Obscenity in the Mails. 341 

from property rights a particular right is to be put; but, in 
respect to lotteries, there can be no difficulty. They are not, 
in the legal acceptation of the term, mala in se, but, as we have 
just seen, may properly be made mala prohibita. They are 
a species of gambling and wrong in their influences. They 
disturb the checks and balances of a well ordered community. 
Society, built on such a foundation, would almost of necessity 
bring forth a population of speculators and gamblers, living 
on the expectation of what 'by the casting of lots or by lot, 
chance or otherwise' might be awarded to them from the ac- 
cumulations of others. Certainly the right to stop them is 
governmental, to be exercised at all times by those in power 
at their discretion. Any one, therefore, who accepts a lottery 
charter does so with the implied understanding that the people, 
in their sovereign capacity and through their properly consti- 
tuted agencies, may revoke it at any time when the public 
good shall require it and this whether it be paid for or not. 
* * * He has in legal effect nothing more than a license 
to continue on the terms named for the specified time, unless 
sooner abrogated by the sovereign power of the State. It is 
a permit good as against existing laws, but subject to future 
legislative and constitutional control or withdrawal." 

This case has been lately affirmed and the reasoning 
therein employed has been approved by the Supreme Court 
of the United States, in Douglass vs. Kentucky, 168 U. S. 
488, which is a case in all respects similar to it. 

. In this case it appears that in 1838 the legislature of 
Kentucky granted the privilege to certain parties to raise 
money by lottery for the benefit of the city schools of Frank- 
fort, and in 1872 the act was amended so as to allow the board 
of councilmen of the city of Frankfort to sell and convey the 
privileges, granted for the purposes mentioned, and Doug- 
lass in 1875 purchased all the lottery franchises and privileges 
conferred by the act of 1838 and also by an amendatory act of 
1869. The scheme devised by the city of Frankfort and 
which it sold to Douglass consisted of 30,900 classes. In con- 
sideration of the sale of this scheme Douglass agreed to pay to 



342 Lotteries, Frauds and Obscenity in the Mails. 

the city various sums at stated times and executed a bond in 
the sum of $100,000 conditioned for a faithful compliance 
with the provisions of the various acts of the legislature, under 
which the lottery was operated and for the payment of all sums 
stipulated to be paid to the city as well as all prizes drawn in 
any class under such lottery scheme. By the act of March 
22, 1890, the legislature of Kentucky repealed the charter of 
the Frankfort lottery and by the constitution of Kentucky of 
1891 all lotteries were prohibited. 

The court held the act of 1890 constitutional and that it 
did not impair the obligation of the contract Douglass had with 
the city of Frankfort within the meaning of the contract 
clause, of the Constitution of the United States. 

Sec. 306. But it was held in New Orleans vs. Houston, 
119 U. S. 265, that, where the right to operate a lottery is 
given by the provisions of the State Constitution to a corpora- 
tion, the legislature can not abrogate the right. The Court 
said : "It is undoubtedly true that no rights of contract are or 
can be vested under this constitutional provision, which a sub- 
sequent constitution might not destroy without impairing the 
obligation of a contract within the sense of the Constitution of 
the United States, for the reason assigned in the case of Stone 
vs. Mississippi (101 U. S. 814). But an ordinary act of legis- 
lation can not have that effect because the constitutional pro- 
vision has withdrawn from the scope of the police power of the 
State to be exercised by the G-eneral Assembly the subject- 
matters of the granting of lottery charters so far as the Louisi- 
ana State Lottery Company is concerned and any act of the 
legislature contrary to this prohibition is upon familiar prin- 
ciple null and void." 

Sec. 307. It may very well be asked what notice Mugler, 
Stone, the Fertilizing Co. and the Boston Beer Co. had before 
or after their property was destroyed by State legislation and 
property too that had been acquired under valid laws, enacted 
by state authority? If property and rights acquired under 
affirmative legislation of the lawmaking power can be destroyed 
without notice or a hearing, a fortiori, may the alleged right 



Lotteries, Frauds and Obscenity in the Mails. 343 

to operate a lottery or fraudulent scheme, attempted to be put 
in operation in defiance of law, be taken away without notice 
or a hearing. According to these cases every scheme deemed 
by the government detrimental to the public morals is out- 
lawed and, when such a case comes before the court, the only 
question to be considered is whether the means provided by 
law for the suppression of such a scheme, "are reasonably 
necessary for the accomplishment of the purpose and .not un- 
duly oppressive upon individuals." If they are found to be 
such, it makes no difference that the power conferred may be 
abused or that the enforcement of the law may operate harshly 
on individuals. The only remedy the parties, who are 
affected, have in such cases, is an appeal to the legislature, or 
to the ballot box and not to the judiciary. 

The final question then is whether the means provided 
by sections 3929 and 4041, Revised Statutes, and the fourth 
section of the Act of March 2, 1895, are reasonably necessary 
for the suppression of lotteries and frauds in the mails and not 
unduly oppressive upon individuals or not. That this ques- 
tion should be answered in the affirmative will appear from 
the following considerations: 

Sec. 308. 1. The issuance of a fraud order, denying the 
use of the mails in toto to a party found to be operating a lot- 
tery or fraudulent scheme, is the only effective means to pre- 
vent the advertisement of such scheme through the mails. 
Experience shows that while the law, reaching only registered 
mail matter and money orders, was in force the promoters of 
such schemes simply resorted to express money orders or bank 
checks inclosed in sealed letters which could reach them with- 
out let or hindrance. The Department was powerless to pre- 
vent these promoters from reaching the people by matter sent 
out by them through the mails, and hence the law became a 
dead letter and a "fraud txrder," affecting registered letters 
and money orders only was mere brutem fidmen : and Congress 
undertook to strengthen this manifestly weak point in the law 
by the Act of March 2, 1895. This Act was a severe blow to 
the promoters of these schemes, but the practice under it has 



344 Lotteries, Frauds and Obscenity in the Mails. 

shown that it is not absolutely effective to accomplish the pur- 
pose designed. The lottery promoters now change the address 
to which mail matter is to be sent and they, still having the 
use of the mails in sending out sealed matter, readily reach the 
people who are advised what the changed address is. The sec- 
retary of a lottery concern in Old Mexico changed his name 
or gave new names, six times in one month, the Department 
issuing a "fraud order" against the new names as soon as ascer- 
tained. And it is believed that the large lottery companies 
of Mexico and other countries are now doing an extensive 
business in the United States under assumed and fictitious 
names. 

Sec. 309. The indictment and punishment of the lottery 
and fraudulent promoters would be utterly inadequate to sup- 
press the evil. At best, that is a slow process, but as related 
to the mail service it is not only slow but very expensive. The 
letter or circular concerning the scheme may be written in 
j\ T ew York and sent to a party in California and in order to 
convict, the witnesses must be brought from long distances at 
an enormous cost to the government and besides that, convic- 
tion is uncertain as it is a difficult matter to get competent 
evidence showing the use of the mails, in furtherance of the 
scheme by the accused. And again many of the schemes are 
consummated in a few days or weeks and before an arrest 
could be made the schemes would be closed up. A conviction 
is punitive only while the law in question provides a preven- 
tive measure. 

Sec. 310. We have a population of 70,000,000 or more, 
a wide extent of territory and about 75,000 postoffices. We 
employ in the mail service over 100,000 persons at an annual 
cost of $100,000,000. The administration of this vast system 
requires energy, promptness and precision. To make the ad- 
ministrative and official acts of the Postmaster-General and his 
subordinates subject to judicial control would be more intol- 
erable and disastrous to the public service than to subject the 
Secretary of the Treasury and his subordinates to such control 
in regard to the collection of the public revenues. 



Lotteries, Frauds and Obscenity in the Mails. 345 

Sec. 311. 2. But it is not true as alleged that the par- 
ties against whom fraud orders are issued have no hearing. 
They are heard sometimes before the orders are issued and j\ 
always afterwards, if they request it. It is true the law does ' 
not provide for a hearing but that makes no difference if a 
hearing is had. The courts will take judicial notice of the 
rules and regulations of an Executive Department of the gov- 
ernment, and they will take judicial notice also of -the usual 
course of administration in the public offices of the country. 
It is a well known historical fact that in this country and Eng- 
land parties, feeling aggrieved by the action of the Executive 
Department, can be fully heard, and are heard on their re- 
quest. The Hoover case is a remarkable one on this point. 
Judge Barr decided that the law was unconstitutional as to the 
order issued against Hoover, because he had had no notice and 
no hearing. The fact is Hoover had been heard many times, by 
mail, in person and by agents and attorneys, extending over a 
period of two years. Failing in his efforts to get the Postoffice 
Department to recede from its position, Hoover made his com- 
pany, the Southern Mutual Bond Investment Company, which 
operated at Lexington Kentucky a so-called bond investment 
scheme, a party to the proceeding before Attorney-General 
Harman in 1895-6, a history of which was given in chapter. Ill, 
ante. That proceeding was pending before the Postmaster- 
General and General Harman for nearly six months. The 
attorneys for the companies made oral arguments, lasting three 
days, and then prepared elaborate printed arguments, and after 
General Harman decided they were operating lottery schemes 
through the mails, Mr. Hoover went into court, alleging that 
he had been deprived of his property and liberty without no- 
tice or a hearing: and to cap the climax the order against him 
had been revoked several months before Judge Barr decided 
the case, Hoover having satisfied the Postmaster-General that 
he had severed his connection with the company and had aban- 
doned the scheme conducted by it, so the court's injunctional 
order, so far as Mr. Hoover was concerned, went against a 
myth only. The reason why the attention of the court was 



346 Lotteries, Frauds and Obscenity in the Mails. 

not called to the revocation of the order is not known to the 
writer. 

Sec. 312. 3. The questions presented to the Postmaster- 
General under these statutes are not generally difficult of so- 
lution. As to lottery schemes they are simple indeed : but as to 
schemes to defraud difficulties sometimes arise, due to the fact 
that questions in regard to these involve a consideration of 
voluminous evidence. The promoter advertises his lottery 
scheme and is compelled to state fully his methods in order to 
induce the public to invest in it. The advertisement of the 
scheme is laid before the Postmaster-General and the facts 
stated in it, being signed by the promoter, and thus admitted 
to be true, the question whether the scheme be a lottery .or not 
becomes one simply of law. If the Postmaster-General is in 
doubt about the law he takes the opinion of the Assistant At- 
torney-General for the Postoffice Department and if he still 
remains in doubt he calls upon the Attorney-General of the 
United States for his views and being thus fortified by the 
opinions of the law officer of his Department and the law offi- 
cer of the government he can not go far wrong and he is no 
more likely to make mistakes than a court of justice is. But 
after a scheme is decided to be a lottery or a fraud another fact 
must be found by the Postmaster-General before he can issue 
a "fraud order" against its promoter. He must find that the 
promoter is using the mails in conducting the scheme. Ordi- 
narily the promoter admits this fact and insists that, his scheme 
is a legitimate one and he has a right to the use of the mails 
in conducting it. "When complaint is made to the Department 
against a scheme alleged to be fraudulent the usual course is 
to send the case to a Postoffice Inspector for investigation and 
report, unless the scheme comes clearly under certain well 
recognized classes of frauds, such as the sale of counterfeit 
money and the like. The Inspector interviews the promoter 
and gets his statement in regard to his methods, and gathers 
all the evidence he can procure respecting the same and trans- 
mits it, with his report thereon, to the Department. If the 
report and the accompanying evidence makes out a case to the 



Lotteries, Frauds and Obscenity in the Mails. 347 

satisfaction of the Postmaster-General a fraud order is issued 
without further notice to the promoter, but if the report is not 
satisfactory, sometimes the case is referred again to the In- 
spector with directions to make further inquiry into certain 
phases of the scheme and report and sometimes the promoter 
is asked to explain certain points in his scheme. If after all these 
precautions are taken there be still doubt as to the character of 
the scheme, the promoter is given the benefit thereof and is not 
molested. If the fraud order be issued, the party, against 
whom it is directed, is always without exception, given not one, 
but many hearings by mail, in person, by agent or attorney, 
if he desires it. There is probably no tribunal on Earth, 
where the facts, in cases affecting the private rights of the 
citizen, are more thoroughly investigated and ventilated than 
in the Postoffice Department. The citizen desiring to operate 
any scheme whatever has free access to the the postal officials 
at all times either by mail, in person, by agent or attorney. 
And the writer can truthfully say after an experience of four 
years as Assistant Attorney-General for the Postoffice Depart- 
ment that during the whole period not a mistake, with one 
possible exception, was made in the issuing of fraud orders but 
many were made in revoking them, the Department always 
giving the accused parties the benefit of the doubt that might 
exist. The mistake, if mistake it was, made in the single ex- 
ception above named in the issuance of fraud orders, was 
promptly corrected by the Postmaster-General, when the mat- 
ter was called to his attention. The writer has no doubt the 
other Assistant Attorney-Generals for the Postoffiee Depart- 
ment will confirm what is here stated. 

Sec. 313. 4. The denial of the authority of the Postmas- 
ter-General to issue a fraud order under the law would neces- 
sarily carry with it the denial of authority on his part to ad- 
minister the postal laws and regulations in many other respects, 
because the principal involved in these other respects 
is precisely the same as in the issuing of a fraud 
order. The law prohibits the transmission through 
the mails of any circular, newspaper or pamphlet as 



348 Lotteries, Frauds and Obscenity in the Mails. 

well as any letter advertising a lottery scheme. A circular, 
newspaper or pamphlet is usually carried open in the mails, 
i. e., unsealed, and it is made the duty of all postal officials to 
refuse to accept, carry or deliver any circular, newspaper or 
pamphlet which concerns a lottery. Under the law thousands 
of circulars, pamphlets and whole editions of newspapers have 
been rejected without notice to either the senders or addressees 
of such matter. jThe same may be said of obscene books, pa- 
pers, pamphlets, circulars and pictures; and to decide without 
notice to the interested parties that such matter is nonmailable 
and to exclude it from the mails because, in the opinion of the 
postal officials, it concerns a lottery or is obscene would be as 
palpable a deprivation of the citizen's property or his liberty 
to use the mails without due process of law, as to decide with- 
out notice to any one that a party is conducting a lottery or 
fraudulent scheme through the mails and for that reason to is- 
sue, without a hearing, a fraud order against him. It will not 
! do to say that no mistakes can be made in regard to open mat- 
ter because it is open and is, therefore, in its nature conclusive. 
It is just as difficult to determine whether a scheme, advertised 
in a circular, newspaper or pamphlet, which is open and may 
be seen and read by the postal official, concerns a lottery as it 
is to determine the same question when the scheme is pre- 
sented to the Postmaster-General for the purpose of obtaining 
from him a fraud order against the promoter of the scheme. 
In either case the official may make a mistake, i, e., he may 
determine that to be a lottery or fraud which is not either and 
a denial of the power under the law to do one necessarily im- 
plies a denial of authority to do the other. The principle in- 
volved in each case is precisely the same; if one falls, the other 
must go with it. But the Supreme Court of the United States 
held in Ex parte Jackson, 96 U. S. 727, that authority to ex- 
clude matter from the mails by a simple inspection of it ex- 
isted. On this point the Court there said: "And as to objec- 
tionable printed matter, which is open to examination, the 
regulations may be enforced in a similar way by the imposition 
of penalties through the courts and, in some cases, by the 



Lotteries, Frauds and Obscenity in the Mails. 349 

direct action of the postal service. In many instances, these 
officers can act on their own inspection and, from the nature of 
the case, must act without other proof; as when the postage is 
not prepaid, or where there is an excess of weight over the 
amount prescribed or where the object is exposed and shows, 
unmistakably, that it is prohibited, as in the case of an obscene 
picture or print. The evidence, respecting them, is seen by 
every one and is, in its nature, conclusive" The Court must 
have meant, by this statement, simply that the evidence in the 
case was conclusive and that the evidence being conclusive it 
was simply a matter of law as to the result to be reached by the 
postal official. The Court could not have meant that the offi- 
cial might not err in his interpretation of the evidence, for it 
is well known that very nice and intricate questions arise in 
regard to what is an obscene picture or print or what is a lot- 
tery or fraud, even in cases where the facts are undisputed and 
conclusive. The fact remains, however, that the official has 
authority, under the ruling of the Supreme Court in the Jack- 
son case, to exclude from the mails any matter which he may - 
decide to be non-mailable. In fact, as to open matter, this 
authority has never been disputed. Indeed to compel the pos- 
tal officials to give notice and a hearing in such cases or to wait 
until the courts could decide the question would so cripple the 
service as to almost destroy its efficiency, and in the language 
of Chief Justice Taney in Commissioners of Patents vs.White- 
ly,ante,"ihe interference of the courts with the performance of 
the ordinary duties of the executive departments would be pro- 
ductive of nothing but mischief." The power to exclude from 
the mails open matter without notice or hearing being thus 
recognized and being essential to the efficient operation of the 
postal service implies a like power when given by law to decide 
a scheme to be a lottery or fraud and to deprive its promoter of 
the use of the mails, though no provision is made for notice or 
hearing. That this power may be abused or its possessor may 
make a mistake occasionally is no argument against the exist- 
ence of the power itself. Courts may make, nay, do make mis- 
takes sometimes and sometimes they abuse the power confided 



350 Lotteries, Frauds and Obscenity in the Mails. 

to them, but that is no reason why they should be deprived of 
the power to act at all. The cases heretofore cited show con- 
clusively that this proposition is not only well settled but also 
rests on solid ground. 

Sec. 314. In conclusion, the law in regard to the statutes 
under review and their administration may be summarized as 
follows: 

1. Congress possesses, under the Constitution, plenary 
power over the entire mail service of the country and can, in 
the exercise of that power, determine what shall and what 
shall not be carried in the mails. 

2. The statutes outlawing matters pertaining to lottery 
schemes and obscenity and authorizing the postal officials to 
exclude such matter, in a summary way, from the mails are 
constitutional and a valid exercise of Federal power. 

3. The duty confided to the Postmaster-General by 
these statutes to determine, upon evidence satisfactory to him, 
that a person is conducting, through the mails, a lottery or 
fraudulent scheme and to issue a fraud order against its pro- 
moter, denying to him the right to receive any mail matter 
under seal, is not judicial in the sense that it can be conferred 
on a court only, but it is, in its nature, an administrative func- 
tion, requiring the exercise of judgment and discretion and 
the courts have no jurisdiction, without express statutory sanc- 
tion, to review the decision of the Postmaster-General, as a 
head of one of the executive departments of the government, 
on that question and that duty can be constitutionally confided 
to the Postmaster-General by the national legislature. 

4. The right to use the mails is not an inherent, inalien- 
able right of the citizen, but is simply a statutory right, which 
may be made subject to such reasonable restrictions and limi- 
tations as the legislative department may see proper to impose. 

5. Congress possesses the power, under the Constitu- 
tion, to exercise the police power in respect of the mail service 
and may lawfully authorize the exclusion from the mails of 
all matter which may corrupt the morals of the people or 
imperil their safety or health, provided the methods for such 



Lotteries, Frauds and Obscenity in the Mails. 351 

exclusion are reasonable and not unduly oppressive upon the 
citizen. And lotteries, frauds, and obscenity come under this 
class. 

6. The power conferred on the Postmaster-General by 
these statutes and the methods provided for their enforcement 
are reasonable regulations to protect the people against matter 
deemed prejudicial to public morals ; and as a corollary of this 
proposition citizens may be required to submit to some incon- 
venience and restraint to subserve the public good in general. 

7. The denial of mail facilities to the promoter of a 
lottery or fraudulent scheme by the issuance of a fraud order 
against him by the Postmaster-General in conformity to the 
laws of Congress is not a deprivation of his right of property or 
liberty "without due process of law " but is strictly "according 
to the law of the land," and is a valid exercise of the police 
power in respect of the mail service. 



NDEX. 



A. 

Section. 

Art Unions -. s 86 

Amusement, Playing for 180 

Advertisement of Lotteries 192-197 

Administration of the Law Chapter VI. 

Administration of the Law, Open and Sealed Matter 247 

Administration of the Law, Open Matter, Disposition of 249 

Administration of the Law, Sealed Matter 250 

B. 

Blanks not Necessary in a Lottery 69, 70 

Bond Investment Schemes, History of 147-9 

Bond Investment Schemes, Hearing Before the Attorney-General, and 

His Decision Thereon 157-160 

Bond Investment Schemes 147-169 

Bonds of Government and Railroads selected for Payment bp lot. . . 161 

Bond Investment Schemes, Change of Policy in Regard to 162 

Bonds Redeemable by Chance 173 

Bonds, Premium 190-191 

Bond Investment Schemes in England 163-165 

Bazaars May Involve Lottery 76 

Base Ball Matches, Pool selling on 142 

Base Ball Matches, Naming Winning Team 146 

Bucket Shops, as' Frauds .208-209 

C. 

Consideration the, Required in a Lottery Scheme 14-16 

Consideration in Lottery Need Not be Money or Property, May be 

Valuable Service 15 

Consideration, General Rule in Regard to, When no Property or 

Money is Paid 16 

Chance, What is 22a et seq. 

Chance as defined by Lexocographers 24 

Chance, Misconceptions as to 26-28 

Chance, Pure, N «t Essential to a Lottery 28a-29 

Chance in General . 67, 68 

Chance Essential Element of a Lottery 12 

Chance, Prizes Dependent upon, Option Deals .30-42 

6)9 OKO 

/do uOo 



354 Index. 

Chance, Prizes Dependent upon, Horse Racing 46-56 

Chance, Prizes Dependent upon; Miscellaneous cases 57-68 

Chance, Dependent upon the Will of Another 90-93 

Chance, Amount of Prizes Dependent on , 100--102 

Chance as to Contents of Vessels, etc 132-136 

Chances, All Taken by Same Party 183 

Chain Letter Schemes, as Lotteries 105 

Competitive Contests 106-110 

Consideration, Essential Element of Lottery 12 

Clubs to Buy Articles 184, 185 

Covers, Outside, Objectionable Matter on 235-239 

Constitutional and Legal Questions 251 et seq. 

Corporations are Persons 291 

Citizen, Eight of to use Mails 294 

D. 

Drawing not Necessary in a Lottery 70 

Definition of Gift Concerts and Gift Enterprises 72-76 

Delineations, What are 240 

Due Process of Law 251 et seq. 

E. 

Envelopes, Objectionable Matter on 235-238 

F. 

First Successful Competitor, Offering Prize to, a Lottery '99 

Fairs may be Lotteries 76 

Frauds, Schemes or Artifices, Statutes in Regard to 198 

Frauds, "^identification Clause" in the Law 199 

Frauds, What is a Scheme or Artifice to Defraud 200 

Frauds, Classified 202 

Frauds Involving the Exercise of Supernatural Power 218 

Fraud, the Disc Case 204 

Frauds, Power to Discover Hidden Treasure 205 

Frauds, Power to Answer Sealed Letters 207 

Frauds, Fortune Tellers 207 

Frauds, Bucket Shops 208, 209 

Frauds, "C, O. D. Business" 210 

Frauds, Collection Agencies. 211 

Frauds, So-called Newspaper Laws 211 

Frauds, Miscellaneous Schemes 212-238 

Frauds, Flag Signal Schemes 212 

Flag Signal Scheme 212 

Frauds, Conspiracy to get Goods Without Pay 213 

Frauds, Counterfeit Money Scheme 214 

Frauds, Intent to Defraud Generally 214 

Frauds, Case of Procuring Patents • • • • 215 

Frauds, Pretence of Having Official Letter 221 



Index. 355 

Fraud, Under Statute Defined 216, 220 

Frauds, Inclosing Worthless Slips of Paper in Letter 217 

Fraud Sending Silk Thread Instead of Silk Cloth 218 

Fraud, Large Fortune Scheme 219 

Fraud, Intent to Defraud one Person Enough 221 

Fraud, Changing Post-Mark of Letter to Effect 216 

Fraud, Selling Article of one Quality and Delivering Another Quality 223 

Fraud, Inducing Person to go to Place at Great Expense 224 

Fraud, Marked Cards for 225 

Fraud, Sending Articles by Mail Without Orders 226 

Fraud, Pretense of Being Merchants - 227 

Fraud, Pretense, of Wanting to Employ Agents 22S--229 

Fraud, an Intent to Defraud Necessary 201 

Fraud, Selling one Kind of Plant and Delivering Another 230 

Fraud, Sale of Mining Stock 233 

Fraud, Town Lot and Land Schemes 232 

Fraud, Each Case Depends Upon its Own Facts 235 

Fraud, Machine to Indicate When to Buy and Sell Stock 234 

Fraud Order, Form of 250 

Fraud Order, Influence on the Law 248 

Fraud Order, Only Effective Means 308 

G. 

Gift Concerts, Gift Enterprises 72 et seq. 

Gift Concerts, What are 72-76 

Gift Concerts, Element of Chance Necessary in 72-74 

Gift Enterprises, Miscellaneous Schemes 77-92 

Guessing Contests 90 

Guessing Contests Where Statistics Ought to be Considered. .. .125-130 

Guessing as to Number of Male and Female Births and Deaths 125 

Guessing as to Number of votes, etc., at Election 126-130 

Guessing as to Number of Bales of Cotton, etc 129 

Guessing as to Number of Words in Column of Newspaper 129 

Guessing as to amount of Bank Clearances 129 

Guessing as to Population of the United States 131 

Guessing Contests as to Contents of Vessels and Weight of Soapl32-137a 

Guessing as to number of buttons in jar 136 

Guessing as to number of beans in jar 134. 135 

Guessing as to Seeds in Watermelon 137a 

H. 

History of Lotteries in Europe I, 2 

History of Lotteries in the United States 3 

History of Lottery Legislation by Congress 4 

History of Anti-Lottery Legislation "by Congress 5, 6 

Horse Races as the Basis of Lottery Schemes 138-146 

Morse Paces, Choosing of Horse by lot 138, 139 



356 . Index. 

Horse Races, Prize for Naming Winning Horse 140, 141 

Horse Races, Pool Selling on 102, 142-145 

I. 

Indictment, Not Effective to Suppress Lotteries, etc 309 

Insurance, Defference Between it and a Lottery 157, 158 

L. 

Lottery, Definition of, General Rules as to 7 

Lottery, So-called Gift Concerts, Gift Enterprises ana Similar Enter- 
prises Offering Prizes Dependent upon Lot or Chance 7 

Lottery, Definition of 10, 11 

Lottery, Essential Elements of 12 

Lottery, The Consideration in 14-16 

Lottery, The Element of Lot or Chance in 22a 

Lotteries, History of in Europe 1, 2 

Lotteries, History of in the United States 3 

Lotteries, Legislation by Congress against 5, 6 

Lotteries, Legislation by Congress in favor of 4 

Lottery, Dependent upon the Result of another Lottery Ill 

Lotteries, Land 114-124 

Lottery, Act in Relation to 6 

Lottery, Wager Element in 13 

Lottery, Non-Essential Elements of . . 69 

Lottery, Method of Drawing Need Not be Named -69 

Lottery Schemes 71 et seq. 

Lottery, Bazaars, Fairs, Etc 76 

Lottery Schemes, Miscellaneous Cases 176--191 

Lottery, Estimate of Yield of Wheat 176 

Lottery, Slot Machine 177. 178 

Lottery Gambling, Amusement 180 

Lottery. Wheel With Numbers 181 

Lottery, Envelopes Avith Numbered Slips 182 

Lottery, Chances all Taken by Same Person . .' 183 

Lottery, Club Schemes to buy Articles , .184, 185 

Lottery, Box With Numbers in it 186 

Lottery, Stock Clock 189 

Lotteries, and the Public Press 192-197 

Law, Administration of by the Postofnee Department Chapter Vl. 

Law, Method of Administration of 247 

Law of the Land 294 

Laws of Congress as they Stand Now 6 

Letter, Chain Contests 92 

M. 

Mystery Story Contests as Lotteries 103 

Missing Word Contests 90, 91 



Index. 357 

N. 

Numbered Papers • 91 

Number on Bill ." 91 

Number of Bicycle 91 

Number Contests 92 

Notice to Operators of Lotteries and Frauds 311 

Notice. Judicial, Taken of Rules of Executive Department and Course 

of Administration 311 

0. 
Obscene Matter in the Mails, History of Legislation in Regard to. . 241 
Obscene Matter in the Mails, Medical Pamphlets, Circulars, Etc. . . 242 

Obscene Matter, Sealed Letter in Relation to 244 

Obscene Matter defined 242 

Obscene Matter, Ignorance of Character of 246 

P. 

Prize, The Element of in a Lottery Scheme 12-17 

Prize, Definition of 17 

Prize in Bond Investment Schemes 18 

Prize, Where Different Articles alleged to be of the Same Value are 

Given 19 

Prize in a Lottery Scheme Must be a Wager 20 

Prize, as Defined by the Courts 20, 21 

Prize Dependent upon Lot or Chance '. 30 et stq. 

Prizes Dependent upon Chance, Option Deals 30-45 

Prizes Dependent on Chance, Horse Racing 46-56 

Prize to First Successful Competitor 99 

Prizes Dependent upon Lot or Chance 57-68 

Prizes, Blanks in 70 

Prizes, Where Amount of Depends on Chance 100-102 

Prize for Best Name of Town 108 

Prize for Best Name of Paper 109 

Prize Fights, Naming Champion in 146 

Probability, What is 28 

Public Press 192-197 

Postal Cards, Objectional Matter Thereon 236, 237 

Power of Congress over the Mails 252 

Postmaster-General, Power of Under the Law .247, 248 

Power Judicial and Administrative 254 et seq. 

Power of Judiciary over Executive Department 254 et seq. 

Power of the Postmaster-General Under Sections 3929 and 4041. 

R- S 254 et seq. 

Power of the Postmaster-General Under the Act of March 2. 1895, 

288 et seq. 

Police Power, Nature of 295 et seq. 

Police Power Applies to Lottery Schemes 305 

Post Office Establishment, its Extent and Importance 310 

Poney, How far Travel t ' mm ' 91 



358 , Index. 

Q. 

Questions presented to Postmaster-General not Difficult 312 

Slot Machines A Lottery 177, 178 

Stock Clock, Lottery 189 

U. 

Unions, Art 86 

Unreasonable Seizure and Search, What 291a 

V. 

Voting Contests 175a, 175b 

W. 

Word Contests 104 

Wager, Essential Element of Lottery 12, 13 

Watch, When it Would Stop 91 

Wrappers, Objectionable Matter on 235-239 



-bhll 8 



